Suppose Output Is $35 Billion,government Purchases Are $10 Billion,consumption Is

question 11

Essay

Suppose output is $35 billion,government purchases are $10 billion,consumption is $15 billion,and net exports are $4 billion.Assume net factor payments equal 0.
(a)Calculate the equilibrium amount of investment.Show your work.
(b)Calculate the equilibrium amount of absorption.Show your work.
(c)Calculate the equilibrium amount of the capital and financial account balance.Show your work.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay, measuring the benefit to consumers from market transactions.

Price Ceiling

A legal maximum price that can be charged for a product or service, intended to protect consumers from high prices.

Consumer Surplus

The discrepancy between what consumers are ready and capable of spending for a good or service, as shown by the demand curve, and the actual amount paid by them, known as the market price.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, due to market prices.