Refer to the following diagram and answer questions 4.1(i) and 4.1 (ii) below: Aggregate spending, millions...

  

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Refer to the following diagram and answer questions 4.1(i) and 4.1 (ii) below: Aggregate spending, millions of rands per year A E3 A = Y A3 =C+I+G = 180 +0.5(1-0.3)Y A4 =C+I+G+ (X-Z) = 205+ (0.5(1-0.3) + 0.15)Y YB Y4 Y3 Total production, income, millions of rands per year (i) With reference to the above diagram, calculate the equilibrium level of income after the introduction of government spending. Show all the steps in the calculation. (5) (ii) With reference to the above diagram, if national income (Y) is R3 500 billion, calculate the induced consumption before the introduction of the foreign sector. Show all the steps in the calculation. (3) Refer to the following diagram and answer questions 4.1(i) and 4.1 (ii) below: Aggregate spending, millions of rands per year A E3 A = Y A3 =C+I+G = 180 +0.5(1-0.3)Y A4 =C+I+G+ (X-Z) = 205+ (0.5(1-0.3) + 0.15)Y YB Y4 Y3 Total production, income, millions of rands per year (i) With reference to the above diagram, calculate the equilibrium level of income after the introduction of government spending. Show all the steps in the calculation. (5) (ii) With reference to the above diagram, if national income (Y) is R3 500 billion, calculate the induced consumption before the introduction of the foreign sector. Show all the steps in the calculation. (3)

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Part i Equilibrium Level of Income with Government Spending Identify the relevant lines and data points Aggregate Expenditure AE line This is the upwa... View the full answer