5. Question 1The economy of Fun land is described asC = 0.8Y1 = 200Where the goods market equilibrium condition is AE = Ya.Find the equilibrium level of output (Y)b. Find the multiplier (M)c.Find the saving level at equilibrium, is it equal to investments?d. What would create a shift in the AE?a. What if the interest rate increased? Would that be a shift?

(a) We know that, Y = C + I It has given that, C = 0.8Y I = 200…

Question 1 The economy of Fun land is described as C = 0.8Y 1 = 200 Where the goods market equilibrium condition is AE = Y a. Find the equilibrium level of output (Y) Find the multiplier (M) D. c. Find the saving level at equilibrium, is it equal to investments? d. What would create a shift in the AE? a. What if the interest rate increased? Would that be a shift?

Question 1 The economy of Fun land is described as C = 0.8Y 1 = 200 Where the goods market equilibrium condition is AE = Y a. Find the equilibrium level of output (Y) Find the multiplier (M) D. c. Find the saving level at equilibrium, is it equal to investments? d. What would create a shift in the AE? a. What if the interest rate increased? Would that be a shift?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 3TY

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