Assume you have the following model of the expenditure sector:AD = C + I + G + NX C = Co + cYD YD = Y - TA + TR TA = TAo TR = TRo I = Io G = Go NX = NXo a. If a change in income by ∆Y = - 800 leads to a change in savings by ∆S = - 160, what is the size of the expenditure multiplier? c. If a change in exports by NX = - 200 is accompanied by a change in consumption by ∆C = - 800, what is the size of the expenditure multiplier?

Assume you have the following model of the expenditure sector:AD = C + I + G + NX C = Co + cYD YD = Y - TA + TR TA = TAo TR = TRo I = Io G = Go NX = NXo a. If a change in income by ∆Y = - 800 leads to a change in savings by ∆S = - 160, what is the size of the expenditure multiplier? c. If a change in exports by NX = - 200 is accompanied by a change in consumption by ∆C = - 800, what is the size of the expenditure multiplier?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 3DQ

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Assume you have the following model of the expenditure sector: AD = C + I + G + NX C = Co + cYD YD = Y - TA + TR TA = TAo TR = TRo I = Io G = Go NX = NXo If a change in income by ∆Y = - 800 leads to a change in savings by ∆S = - 160, what is the size of the expenditure multiplier?
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Assume you have the following model of the expenditure sector: AD = C + I + G + NX C = Co + cYD YD = Y - TA + TR TA = TAo TR = TRo I = Io G = Go NX = NXo If a change in exports by deltaNX = - 200 is accompanied by a change in consumption by ∆C = - 800, what is the size of the expenditure multiplier?
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