Macroeconomics

Learn the toughest concepts covered in your Macroeconomics class with step-by-step video tutorials and practice problems.

Deriving the Aggregate Expenditures Model

AE Model: Algebraic Approach

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concept

Algebraic Approach to the AE Model

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example

Aggregate Expenditures

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Problem

Use the following information to solve for macroeconomic equilibrium (T is a lump-sum tax): 

C = 1,500 + 0.75(Y-T) 

I = 3,400 

G = 2,600 + T 

X = 750 

M = 2,000 

T = 500