Consider a Simple Macro Model with a Constant Price Level

question 78

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.The equations of the model are: C = 60 + 0.43Y,I = 150,G = 260,T = 0,X = 90,IM = 0.06Y.The trade balance at equilibrium national income is

• A)a deficit of 36.67.
• B)a deficit of 21.43.
• C)zero.
• D)a surplus of 21.43.
• E)a surplus of 36.67.

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Definitions:

Government

The system or group of people governing an organized community, often a state.

Sellers

Individuals or entities that offer goods or services in exchange for payment.

Price Ceiling

A legally imposed limit on how high a price can be charged for a product, service, or resource.

Quantity Demanded

The total amount of a goods or services consumers are willing and able to purchase at a specific price point.