The following equations describe a small open economy. Figures are in millions of
dollars; interest rate is in percent per annum. Assume that the price level is fixed.
C = 300 + 0.85YD
YD = Y + TR
T = 80 + 0.15Y
Major Assignment Ec201
Due Date: Friday, 30th September, 2016 (end of week 11)
1. This assignment will be marked out of 100
2. Answer all questions
3. This assignment covers all relevant chapters of the prescribed text book.
Section A: Conceptual Question