Gce Model Questions Vol1 2021 Economics Question 18
Practice objective / multiple choice question 18 from the 2021 Gce Model Questions Vol1 Economics examination.
In a closed economy the consumption function is \(C = 200 + 0.75Y_d\) where disposable income \(Y_d = Y - T\) and taxes are \(T = 0.2Y\). Investment \(I = 150\), government spending \(G = 100\) and net exports \(NX = 20\) (all values in millions).\n(a) Find the equilibrium national income \(Y\).\n(b) If autonomous consumption rises by \(30\) (so the constant term becomes 230), what is the new equilibrium \(Y\)?
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About This Question
This is Gce Model Questions Vol1 2021 Economics Question 18. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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