Consider the following economy

Ca = 1850 - 15 R; c= 0.60 ; Ta= 1,800; t = 0 ; Ip = 20 (100 - 1.2R ) ;

G = 2,000; X = 1,600 ; NX = -1,255. Assume nx = 0.

a) Compute the marginal propensity to save

b) Calculate the amount of imports for this country

c) Compute the multiplier

d) Derive the equation of the autonomous spending and compute its value for R = 4

Answer rating: 100% (QA)

a C 060 MPC MPS 1 MPC 1 060 MPS 040 b NX X M 1255 1600 M M ... View the full answer