Question: Given the following model: Y = C + I + G + (X-M) Question Suppose that: Autonomous Consumption = $500 MPC = 0.75 Taxes =

Given the following model:

Y = C + I + G + (X-M)

Question

Suppose that:

Autonomous Consumption = $500

MPC = 0.75

Taxes = $400

Investment = $500

Government Spending = $1200

Exports = $300

Imports = $500


Find the following: (2 points each)

A. Equilibrium income

B. Equilibrium consumption

C. Equilibrium saving

D. Write the savings function

E. Show that injections equal withdrawals


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