Macro 3 - Y = C I G and then solve for Y b Calculate the...

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Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by the equation C = 200 + 2/3( Y T ). Planned investment is 300, as are government spending and taxes. a. How much is equilibrium Y ? ( Hint : Substitute the values of equations for consumption, planned investment, and government spending into the equation
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Unformatted text preview: Y = C + I + G and then solve for Y .) b. Calculate the equilibrium level of 1. consumption, 2. private saving, 3. public saving, 4. and national saving. c. How much does equilibrium income decrease when G is reduced to 200? d. How much is the government purchases multiplier?...
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