Question
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
| Income Or Output Y | Consumption Expenditure C | Investment Expenditure I | Government Expenditure G | Net export Expenditure NX |
| $4,000 | 3,925 | 100 | 100 | 25 |
| 4,100 | 4,000 | 100 | 100 | 25 |
| 4,200 | 4,075 | 100 | 100 | 25 |
| 4,300 | 4,150 | 100 | 100 | 25 |
| 4,400 | 4,225 | 100 | 100 | 25 |
| 4,500 | 4,300 | 100 | 100 | 25 |
| 4,600 | 4,375 | 100 | 100 | 25 |
| 4,700 | 4,450 | 100 | 100 | 25 |
| 4,800 | 4,525 | 100 | 100 | 25 |
| 4,900 | 4,600 | 100 | 100 | 25 |
| 5,000 | 4,675 | 100 | 100 | 25 |
c) If government expenditure grows to $150, what will be the new equilibrium level of income?
Answers
Y C I G NX AE = C+I+G+NX 4000 3925 100 150 25 4200 4100 4000 100 150 25 4275 4200 4075 100 150 25 4350 4300 4150 100 150 25 4425 4400 4225 100 150 25 4500 4500 4300 100 150 25 4575 4600 4375 100 150 25 4650 4700 4450 100 150 25 4725 4800 4525 100 150 25 4800 4900 4600 100 150 25 4875 5000 4675 100 150 25 4950 c) If government expenditure grows to $150, the new equilibrium level of income is $4,800.
Equilibrium occurs where, Y = AE
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