Consider the goods market model where consumption is given by: C = co + C1(Y investment is given by: I = b, + bịY – bzi, and tax is given by T = to + t,Y. G is government spending and is given. Assuming co = 100, cq = 0.6, bo = 150, bị = 0.2, = 0.3, and b, = 1,000. Keeping all other things constant, what will be the change in the %3D %3D %3D t1 equilibrium output (Y*) in the goods market if the interest rate, i, is reduced by 5% (round the nearest decimal point)? Da. All of the answers here are incorrect O b. $327.4 Dc S86.2 Od.$125.0 De. S250.0

Consider the goods market model where consumption is given by: C = co + C1(Y investment is given by: I = b, + bịY – bzi, and tax is given by T = to + t,Y. G is government spending and is given. Assuming co = 100, cq = 0.6, bo = 150, bị = 0.2, = 0.3, and b, = 1,000. Keeping all other things constant, what will be the change in the %3D %3D %3D t1 equilibrium output (Y*) in the goods market if the interest rate, i, is reduced by 5% (round the nearest decimal point)? Da. All of the answers here are incorrect O b. $327.4 Dc S86.2 Od.$125.0 De. S250.0

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 1TY

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