Handout 4b - Handout 4b Income-Expenditure Model Real GDP...

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Handout 4b – Income-Expenditure Model Spring 2007 Page 1 of 2 Real GDP Autonomous Consumption Total Consumption Other Autonomous Expenditure Planned Aggregate Expenditure Unplanned Aggregate Expenditure Y C C P I GN X ++ PAE Y - PAE 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 Data: The consumption function is 500 (3/ 4)* CY =+ so that 500 C = , MPC = 3/4 and T = 0. Other autonomous expenditure P I X is 2,000. Potential real GDP is Y * = 16,000. Tasks: 1. Using the consumption function and autonomous expenditure data listed above, fill in the above table. Indicate the equilibrium level of real GDP ( Y eq ) by circling the row.
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Handout 4b – Income-Expenditure Model Spring 2007 Page 2 of 2 0 2,000 4,000 6,000
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This note was uploaded on 04/18/2008 for the course ECON 100 taught by Professor Kasilwal during the Spring '07 term at CSU Long Beach.

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Handout 4b - Handout 4b Income-Expenditure Model Real GDP...

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