Spose that a countrys imports are given im201y and their


Suppose that a country's imports are given IM=20+.1Y, and their consumption is given by C=100+.8Y. If the government increases government spending by 300, by how much will output and imports change?

My work:

Government multiplier= 1/(1-.8+.1)=10

How is the answer, outputs rise by 1000 and imports rise by 100?

Solution Preview :

Prepared by a verified Expert
Macroeconomics: Spose that a countrys imports are given im201y and their
Reference No:- TGS01399727

Now Priced at $10 (50% Discount)

Recommended (95%)

Rated (4.7/5)