You Are Given the Following Information on the Macroeconomy in Millions

question 91

Essay

You are given the following information on the macroeconomy in millions dollars):
Consumption: 250 + 0.50Y
Investment: 100 + 0.10Y Government Spending 400
Exports 50
Imports 50 + 0.25Y
Compute the equilibrium level of income, the size of the multiplier, and the change in equilibrium income for a decrease in autonomous investment of $75 million.

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Definitions:

Domestically

Pertaining to or occurring within a country's borders; not foreign or international.

Worldwide

Pertains to activities or operations that are carried out on a global scale, affecting or involving people from all over the world.

Services

Activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

World Trade Organization

An international organization designed to supervise and liberalize world trade by providing a forum for negotiation and dispute resolution.