Homework #4

Assume the following set of numbers.

Ca = 50

Cy = 0.75

Ip = 300 + 30r

G = 400

T = 200 + 0.2Y

X = 400

M = 300 + 0.05Yd

r = 5

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1. What is the value of Equilibrium Y in this model?

2. At Equilibrium what is the value of C?

3. At equilibrium what is the value of S?

4. At equilibrium what is the value of the budget balance?

5. What is the equilibrium value of the trade balance?