Answer to Question #326649 in Finance for Mark

Question

Given that 𝐶 = 100 + 0.8𝑌; 𝑀 = 150 + 0.2𝑌; 𝐼 = 100 𝑎𝑛𝑑 𝑋 = 350,

a) Determine the equilibrium income

b) Show the results on two graphs with

(i) Injections and leakages on the vertical axis

(ii) Net injections and net domestic leakages on the vertical axis

c) Determine the new equilibrium and show on graph when there is;

i.An increase in X and I of 200

ii.A decrease in M of 100

iii.A decrease in S and M of 100

Answer 1

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