Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, I is investment, G is government purchases, and T is for net taxes: C = 25+0.75×(Y−T)
Suppose G = $130 billion, I = $60 billion, and T = $20 billion.
Given the consumption function and the fact that, in a closed economy, total expenditure can be calculated as Y=C+I+G, the equilibrium output level is
$
billion.
Suppose the government purchases are reduced by $50 billion. The new equilibrium level of output will be equal to
$
billion.
Based on the effect of the change in government purchases on equilibrium output, you can tell that this economy's spending multiplier is equal to .

according to this law, when unemployment goes up by 1%, gdp drops by 2%. in the question, unemployment rate goes from 2% to 5%, meaning unemployment goes up by 3%, so the gdp drops by 6%. thus the effect is a drop in gdp by 6%.

step-by-step explanation:

step-by-step explanation:

let

we know that

the y-intercept is the y-coordinate of the point when the value of x is equal to zero

so

the y-coordinate of the point a is the y-intercept

the answer part a) is

the value of y-intercept is

part b) find the slope m

we know that

the value of the slope is equal to

substitute the values

therefore

the answer part b) is

the value of the slope is equal to

the general answer is

the slope is

the value of y-intercept is

-12 > a

step-by-step explanation:

-11 > 1 + a

subtract 1 from each side

-11-1 > 1-1+a

-12 > a