T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the following equations: (i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30 (iii) y = c + x − s (iv) x = 93.53 Here x denotes total investment, y is disposable income, s is the total saving by firms, and c is total consumption. Write the system of equations in the form (1) when the variables appear in the order x, y, s, and c. Then find the solution of the system.

T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the following equations: (i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30 (iii) y = c + x − s (iv) x = 93.53 Here x denotes total investment, y is disposable income, s is the total saving by firms, and c is total consumption. Write the system of equations in the form (1) when the variables appear in the order x, y, s, and c. Then find the solution of the system.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 7E

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