1.1. The following mathematical equations reflect the performance of the economy and inventory changes play a very important role in the SKM. Consider a simple Keynesian model where C = 540 +0.7Y and != 360+ 0.2Y the country is considered closed economy, and without the government. 1.1.1. Determine the equilibrium income level of the country. ANSWER: 1.1.2. Suppose that in this country last year's aggregate demand determines this year's production. If autonomous investment increases from 360 to 430 then what will be the national income in three years' time? ANSWER: 1.1.3. Given the solution in 1.1.2. briefly explain the type of effect the increase in autonomous investment had on national income.

1.1. The following mathematical equations reflect the performance of the economy and inventory changes play a very important role in the SKM. Consider a simple Keynesian model where C = 540 +0.7Y and != 360+ 0.2Y the country is considered closed economy, and without the government. 1.1.1. Determine the equilibrium income level of the country. ANSWER: 1.1.2. Suppose that in this country last year's aggregate demand determines this year's production. If autonomous investment increases from 360 to 430 then what will be the national income in three years' time? ANSWER: 1.1.3. Given the solution in 1.1.2. briefly explain the type of effect the increase in autonomous investment had on national income.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 4SQ

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1.1. The following mathematical equations reflect the performance of the economy and inventory changes play a very important role in the SKM. Consider a simple Keynesian model where C = 540 + 0.7Y and I = 360 +0.2Y the country is considered closed economy, and without the government. 1.1.1. Determine the equilibrium income level of the country. ANSWER: 1.1.2. Suppose that in this country last year's aggregate demand determines this year's production. If autonomous investment increases from 360 to 430 then what will be the national income in three years' time? ANSWER: 1.1.3. Given the solution in 1.1.2. briefly explain the type of effect the increase in autonomous investment had on national income. ANSWER:
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