In a closed economy, the consumption function is: The tax function is: c=4.5 +0.8(y - t)...

  

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In a closed economy, the consumption function is: The tax function is: c=4.5 +0.8(y - t) billions of 2020 Hollars. t = 0.1y + 0.6 billions of 2020 dollars. Planned investment is $3.5 billion and planned government expenditures are $3 billion. Calculate: 1. The equilibrium level of real GDP. (3 points) 2. Consumer expenditures (3 points) 3. Saving (2 points) 4. The investment multiplier (2 points) 2 5. The government budget deficit (2 points) 6. The leakages from and injections into the circular flow of income and expenditure. Do leakages equal injections? (3 points) In a closed economy, the consumption function is: The tax function is: c=4.5 +0.8(y - t) billions of 2020 Hollars. t = 0.1y + 0.6 billions of 2020 dollars. Planned investment is $3.5 billion and planned government expenditures are $3 billion. Calculate: 1. The equilibrium level of real GDP. (3 points) 2. Consumer expenditures (3 points) 3. Saving (2 points) 4. The investment multiplier (2 points) 2 5. The government budget deficit (2 points) 6. The leakages from and injections into the circular flow of income and expenditure. Do leakages equal injections? (3 points)

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Solving for Macroeconomic Variables in a Closed Economy 1 Equilibrium Level of Real GDP To find the equilibrium level of real GDP Y we need to set agg... View the full answer