Hi all,
I'm having difficulties in doing this question for ECO203e ECA. Can someone help me out? TIA
The question:
Consider an open economy without a government sector. It has the compenents of aggregate spending as follows:
- C =120 + 0.8Y
- M = 60
- I = 500
- X = 200
- C is consumption, Y is income, M is import, I is investment and X is export.
(i) discuss and determine the saving function, the multiplier, the equilibrium level of income and the trade balance at the equilibrium level of income?
How to calculate the multiplier?
What is trade balance at the equilibrium level of income?
Please help. TIA.
I'm having difficulties in doing this question for ECO203e ECA. Can someone help me out? TIA
The question:
Consider an open economy without a government sector. It has the compenents of aggregate spending as follows:
- C =120 + 0.8Y
- M = 60
- I = 500
- X = 200
- C is consumption, Y is income, M is import, I is investment and X is export.
(i) discuss and determine the saving function, the multiplier, the equilibrium level of income and the trade balance at the equilibrium level of income?
How to calculate the multiplier?
What is trade balance at the equilibrium level of income?
Please help. TIA.
