Suppose an Economy Has Output of 2100,government Spending of 40,consumption

question 70

Essay

Suppose an economy has output of 2100,government spending of 40,consumption of 1600,and absorption of 1940.Calculate the equilibrium values of investment and net exports.

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Definitions:

Marginal Cost

The additional cost incurred in producing one more unit of a good or service, crucial for decision-making about production levels.

Learning Effects

These are reductions in production costs that occur due to learning and improving over time, as processes become more efficient with experience.

Marginal Costs

The increase in total cost that arises from an extra unit of production.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.