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Internet Explorer Take a Test https://www.matul.com/Student/PlayerTestaspx?testid=173158434&centerwinayes; Econ 3001 Wintersession 2017/2018 Quiz: Quiz Chapter 20 This Question: 1 pt ge.@ 27of32(22 complete) f the consumption function is C 100+075Y and planned investment spending is 200, what will be the equilibrium level of output? v,=s (Enter your response as an nteger) If planned investment falls by 100, how much does the equilibrium level of output fall? aye-s (Ender your response as an rtegor)

Explanation / Answer

A.Y=C+I

I=200

C=100+.75Y

Y=100+.75Y+200

Y-.75Y=300

.25Y=300

Y=300/.25

Y=1200

B.I=100 (Investment falls by 100)

Y=100+.75Y+100

Y-.75Y=200

.25Y=200

Y=200/.25Y

Y=800

Change in equilibrium output=1200-800=400

Equilibrium output falls by 400

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