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C=… Show more Assume that all expenditure is summarized in

Paper help Economics C=… Show more Assume that all expenditure is summarized in

Economics

C=… Show more Assume that all expenditure is summarized in

C=… Show more Assume that all expenditure is summarized in the following consumption and investmnet functions: C= $150billion + 0.8YD I=$250billion a. Identify the equilibrium rate of output (or GDP). b. If full-employment GDP equals $2500 billion, what kind of Gap will develop (recessionary or Inflationary). c. How much is the gap? d. What will happen to that gap according ot Classical Economist? e. What will happen to the gap according to Keynes? f. What is the value of the multiplier? g. What would happen to equilibrium GDP if the rate of investment increased to $300 from current $250 billion per year? h. If net exports go up by $20 billion would would happen to Equilibrium GDP. All parts need calculations except for b and d. • Show less

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