For an economy with a tax rate of 15%, the following expenditure functions are given; C...
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For an economy with a tax rate of 15%, the following expenditure functions are given; C 150 +0.8YD G = 750 I = 520 NX = 100 -0.18Y a) Compute the multiplier and the equilibrium level of national income. (7 marks) b) Calculate the equilibrium value of consumption spending. (3 marks c) Calculate the equilibrium value of national asset formation (4 marks) d) In equilibrium, what is the total value of leakages from this economy? (3 marks e) What three changes in this economy would increase the size of the multiplier? (3 marks) For an economy with a tax rate of 15%, the following expenditure functions are given; C 150 +0.8YD G = 750 I = 520 NX = 100 -0.18Y a) Compute the multiplier and the equilibrium level of national income. (7 marks) b) Calculate the equilibrium value of consumption spending. (3 marks c) Calculate the equilibrium value of national asset formation (4 marks) d) In equilibrium, what is the total value of leakages from this economy? (3 marks e) What three changes in this economy would increase the size of the multiplier? (3 marks)
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a To compute the multiplier and the equilibrium level of national income we need to use the expendit... View the full answer
Related Book For
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
Posted Date:
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