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5. Consider the following national income model
Y = C+I+G+X-M
C=0.75(Y-T)
M=0.25Y
I=820
G=960
t=0.3
X=650
Find the equilibrium values of Y, C and M
C=0.75Y-0.225
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given that c=200+0.8(y-t).
a. what is the equilibrium level of national income?
b. derive the savings function and find the level of savings.
c = 200 + 0.8(y - t) a. the equilibrium level of national income will be: c = 200 + 0.8y - 0.8t, so 0.8y = c + 0.8t -...
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Given a hypothetical economic model of the form:
Y = C + I0 + G0
C = α + β
Where: = Y – T
Y = Income
T = Taxes and that:
Compute the equilibrium level of income and consumption
If Y = C + I0 + G0, C = α + β(Y - T), then the equilibrium level of income will be Y = α + β(Y - T)...
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In order to stimulate the National Economy, how should the government affect each of the main Variables in the National Income Model. Y= C+G+I+(X-M)?
- For stimulating consumption (C) the government should cut the income taxes. - Government can rise its spending (G) by financing, for instance, infrastructure constructing programs, - Investment (I) stimulation...
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Is the equilibrium level of income also the full employment level of income? Explain your answer
The equilibrium level of income is not necessary the full employment level of income. Using the AD/AS model, the equilibrium national income level is determined where AD interacts with AS....
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How to determine equilibrium level of income. Where Y=C+Io+Go C=a+bYd Yd=Y-T a=100 Io=100 b=0.75 T=200 Go=200
Y=C+Io+GoY=a+bYd+Io+Go Y=100+0.75Yd+100+200Y=0.75Yd+400Yd=Y-TY=Yd+TY=Yd+200Yd+200=0.75Yd+400Yd-0.75Yd=400-2000.25Yd=200Yd=200:0.25Yd=800Y=0.75Yd+400=0.75х800+400=1000Y=Yd+200=800+200=1000
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Given that: C=$40m, I=$60m, G=$20m, T=$20m. Find : 1. Equilibrium Level of income. 2. Consumption expenditure. 3. Level of savings. 4. New income Level if investment falls by $10m.
1. Equilibrium Level of income is:Y = C + G + I = 40 + 20 + 60 = 120.2. Consumption expenditure is:C = 40.3. Level of savings is:S =...
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Jane earns an income of R10 000 a month and pays R1 500 towards income tax, and when her income increases to R24 000 a month, she now pays R3 600 towards income tax. This is an example of a?
A progressive tax
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Jane earns an income of R10 000 a month and pays R1 500 towards income tax, and when her income increases to R24 000 a month, she now pays R4 200 towards income tax. This is an example of a
This is an example of an increase in the income tax rate depending on the level of wages.With an income of 10,000, Jane pays income tax in the amount of...
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Discuss the importance of national income Statistics and state the difference between national income at market price and national income at factor cost.
National Income statistics provides information on the country’s economic performance over a period of time to be used for making economic policies or budgeting or planning.The market value of the...
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