If Yad = 700 + 0.64(Y-T), where T=40, then what is the equilibrium aggregate out

ID: 1092187 • Letter: I

Question

If Yad = 700 + 0.64(Y-T), where T=40, then what is the equilibrium aggregate output (Y)? Round final answer to nearest whole number.

If Yad = 400 + 0.70Y, then what is equilibrium aggregate output (Y)? Round final answer to nearest whole number.

If taxes are increased by 100 and the mpc is 0.6, equilibrium aggregate output changes by:

+100

-100

-150

+150

-250

+250

If taxes are increased by $100 and autonomous government spending increases by $100, what happens to the IS curve?

The IS curve decreases (moves left)

The IS curve increases (moves right)

There is a movement down the IS curve

y= 700 +0.64(y-40)

.36y= 674,4

y= 1,873.33= 1873

y= 400 +.7y

.3y= 400

y= 1,333.33= 1,333

Tax miltipiler is -mpc/mps= -.6/.4= -1,5 -1.5*100= -150

Move to the right (by a fairly small amount).

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