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1)Each year consumers spend $800 million regardless of the level of their disposable income
1)Each year consumers spend $800 million regardless of the level of their disposable income. In addition to this $800 million, they always spend 75% of their yearly disposable income
investment=$250 million
Govt expenditure= $120 million
Net tax =$100 million
Exports =$170 million
Imports = 15% Disposable income.
How do I calculate the country's output level?
2)she has the VNM utility function v. 7. Now suppose that X is the set of integers. Would the NM utility functions u(x) = 3x + 2 sin(27x) and v(x) = 7x + 5 yield different choices over lotteries? 8. Let X - Loc. lhe the set of incizes Innebabe following cuactions
Expert Solution
1)C=a+b(Y-T), where a is the autonomous consumption, b represents the marginal propensity to consume and Y represents the income and t denotes tax.
C = 800+0.75*(Y-100), G=120, T = 100, X = 170 and M = 0.15(Y-T)
Y = C+G+I+X-M
Y=800+0.75*(Y-100)+120+250+170-0.15*(Y-100)
Y=800+120+250+170-75+15+0.75Y-0.15Y
Y=1280+0.6Y
0.4Y=1280
Y = 1280/0.4 = 3200 (Country's output level)
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