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Problem 14 says, assume that consumption schedule for a private open economy such that consumption c is equal to 50 plus 0 .8y.
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Assume further that planned investment ig and net exports, xn, are independent of the level of real gdp and constant at ig is equal to 30 and xn is equal to 10.
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Recall also that in equilibrium, the real gdp, the real output produced is equal to aggregate expenditure.
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Y is equal to cig plus xn.
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Question a, calculate the equilibrium level of income or real gdp for this economy.
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So to find the real gdp for this economy, the equilibrium gdp, you simply use our formula, which is why is equal to c plus i plus i, plus net exports and we're simply plug in the values for consumption which is 50 plus 0 .8 y we plug in investments which is 30 and we're plugging net exports which is 10 so we just solve for y so taking 0 .8 to the other side we get 1 y minus 0 .8 y and we get 0 .2 y and we add 50 plus 30 plus 10 which gives us 90 and 90 divided by 0 .2 is 450.
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We've run on to question b...