Question

# Keynesian Algebraic Model: Assume the following: C=$10+.9(yd) I=$40-10(i) G=90 i=.2(20%), T=$10+.2Y M=$6 +.05Y

X=$30

a. Find Equilibrium Income that corresponds to A.D. = A.S. Show work.

b. Compute, showing all work for: Disposable Income, Consumption, Investment, Saving, Taxes, Imports.

c. Confirm that "Leakage" equals "Injections"

d. What would be the "New Equilibrium Y" if Government spending increased by $10?

e. What would be the "New Equilibrium Y" if the "marginal prosperity to import rose from .05Y to .10Y. Show work.

#### Top Answer

Give the following Keynesian Algebraic Model: Assume the following: C=$10+.9(yd) I=$40-10(i) G=90 i=.2(20%), T=$10+.2Y... View the full answer