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Math Help - Consumption function

  1. #1
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    Consumption function

    Suppose the consumption function is C
    =150+0.5*Y, where C is consumption and Y is real GDP (both are in billions of $). Assuming that I=$100 billion, G=$150 billion, and NX=-$50 billion, how much is equilibrium real GDP in this economy?

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  2. #2
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    Does the formula Y = C + I + G + NX ring a bell?

    You have C = 150 + 0.5*Y. Substitute the function into the top equation and solve for Y.
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  3. #3
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    It's odd how I make things so much harder than they need to be. Thanks for "ringing my bell".
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