helpppppp (1 Viewer)

[Haku]

one smart cookie.

 

[MeehShanku]

         Y              C                 I
        100            110               50
        200            190               50
        300            270               50
        400            350               50
        500            430               50

by inspection, C = 30 + 0.8Y
also note equilibrium occurs when Y = C + I

so Y = 30 + 0.8Y + I,
0.2Y = 30 + I,
Y = 150 + 5*I
as I = 50, Y = 400 is the initial national income from equilibrium

if I = 50 + 30, then Y = 150 + 400
= 550

good work. Simple algebra but good thinking

 

[kouklitsa]

autonomous investment: Business investment expenditures that are unrelated to income or production (especially national income or gross national product). These are investment expenditures that would occur even if national income was zero. Autonomous investment is graphically depicted as the vertical intercept of the investment line relating investment to national income. Changes in autonomous investment, along with changes in other autonomous expenditures, are what trigger the multiplier effect.


^^^ to me that suggests that NOTHING CHANGES IN EQUILIBRIUM...... maybe im wrong but shouldnt equilibrium remain at 400?

 

[rn21]

my apologies the answer to 8 is B i didn't even realise the questions were linked (didn't read properly) but yer the're both B then