Calculating Macroeconomic Equilibrium and the MultiplierAssume that the consumption schedule for a private open

economy is such that consumption C = 50 + 0.8Y. Assume further that planned

investment Ig and net exports Xn are independent of the level of real GDP and

constant at Ig = 30 and Xn = 10. Recall also that, in equilibrium, the real

output produced (Y) is equal to aggregate expenditures: Y = C + Ig+ Xn.Calculate the equilibrium level of income or real GDP for

this economy?

What happens to equilibrium Y if Ig changes to 10? What does

this outcome reveal about the size of the multiplier?

Calculating Macroeconomic Equilibrium and the MultiplierAssume that the consumption schedule for a private open

economy is such that consumption C = 50 + 0.8Y. Assume further that planned

investment Ig and net exports Xn are independent of the level of real GDP and

constant at Ig = 30 and Xn = 10. Recall also that, in equilibrium, the real

output produced (Y) is equal to aggregate expenditures: Y = C + Ig+ Xn.Calculate the equilibrium level of income or real GDP for

this economy?

What happens to equilibrium Y if Ig changes to 10? What does

this outcome reveal about the size of the multiplier?

Calculating Macroeconomic Equilibrium and the MultiplierAssume that the consumption schedule for a private open

economy is such that consumption C = 50 + 0.8Y. Assume further that planned

investment Ig and net exports Xn are independent of the level of real GDP and

constant at Ig = 30 and Xn = 10. Recall also that, in equilibrium, the real

output produced (Y) is equal to aggregate expenditures: Y = C + Ig+ Xn.Calculate the equilibrium level of income or real GDP for

this economy?

What happens to equilibrium Y if Ig changes to 10? What does

this outcome reveal about the size of the multiplier?

economy is such that consumption C = 50 + 0.8Y. Assume further that planned

investment Ig and net exports Xn are independent of the level of real GDP and

constant at Ig = 30 and Xn = 10. Recall also that, in equilibrium, the real

output produced (Y) is equal to aggregate expenditures: Y = C + Ig+ Xn.Calculate the equilibrium level of income or real GDP for

this economy?

What happens to equilibrium Y if Ig changes to 10? What does

this outcome reveal about the size of the multiplier?