Question:

What is GDP equilibrium and how do I find it?

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What is GDP equilibrium and how do I find it?

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  1. i think GDP stands for gross domestic product. this is some subject that the economics who run this nation need to worry about. and i guess the equilibrium in "GDP equilibrium " just stands for the management of the GDP so that it will be at a level that is in the best intrest of the country.  

    but honestly, i don't really know what it means


  2. You need a quantitative model with few simultaneous equations to finfd GDP equilibrium. GDP equilibrium is a situation where the level of GDP is consistent with equilibrium in different markets so that there is no excess aggregate demand, or excess aggregate supply.

    Foe example Y=C+I+G is the standard macroeconomic Income - Expenditure identity. C= a+b(Y-T), I= 400 and G=148 and T= 110, a=10 and b= mpc = 0.8. Now solve the equations for Y, you get the GDP equilibrium value:

    Y= 10 + 0.8 (Y-110) +400 +148

    or, 0.2Y= 10 - 88 + 548,  0r, 0.2= 470, or, Y= 2350 is equilibrium GDP.

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