Consider a Simple Macro Model with a Constant Price Level

question 26

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.The equations of the model are: C = 150 + 0.8Yd,Yd = Y-T,I = 400,G = 700,T = 0.2Y,X = 130,and IM = 0.14Y.Equilibrium national income in this model is

• A)1120.
• B)1350.
• C)2240.
• D)2760.
• E)5400.

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Definitions:

Total Income

The sum of all earnings or revenue generated by an individual or entity from various sources before any deductions.

U.S. Income Distribution

The way in which total income is shared among the population of the United States.

Crowding Model

A theory or model that explains how public sector involvement can displace or reduce private sector activity in certain markets.

Occupational Segregation

The division of labor in which different groups of workers, often based on gender, ethnicity, or race, are systematically allocated different kinds of jobs.