What is balance of trade at equilibrium-surplus or deficit

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Reference no: EM131194450

Consider the following aggregate economy Note that taxes and imports rise with income. Assume that interest rates, exchange rates and prices are fixed.

C=250+0.8(Y-T)

I=50

G=1200

T=400+0.2Y

EX=1000

IM=100+0.5(Y-T)

a) Calculate the equilibrium output in this economy

b) What is the balance of trade at equilibrium? Surplus or deficit?

c) What is the government spending multiplier in this economy? Give a numerical answer

Reference no: EM131194450

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