00:01
So while seeing the question, let's further move to the answer.
00:03
So let's see here that therefore we substitute g for yd in the consumption function to find c as such.
00:45
So c is equal to 100 plus 0 .75 into 200, which is equal to 250.
00:56
So we can now calculate the equilibrium level of output using the yad equation above with the remaining given information as follows.
02:14
So here is yad is equal to c plus i plus g plus nx.
02:25
So here is c is equal to consumption expenditure, i is equal to planned in investment spending g is equal to government expenditure and x is equal to net exports.
03:34
So here is yad is equal to 250 plus 200 plus 200 plus 0 which is equal to 650.
03:49
So the equilibrium level of output is 650.
04:07
So to find the change in aggregate output when government spending increases by 100 first find the change in consumption using the consumption function above.
05:36
So here is c is equal to 100 plus 0 .75 into 200 plus 100 plus 100 which is equal to 325.
05:52
So using the yad equation above we can calculate the resulting aggregate output with the new values...