Question: 1. Consider the simple macro model with a constant price level and demand-determined output. If the government decreases its autonomous expenditures by 40 billion, causing

1. Consider the simple macro model with a constant price level and demand-determined output. If the government decreases its autonomous expenditures by 40 billion, causing equilibrium national income to fall by 151 billion, What is the marginal propensity to spend? Please show your steps.

The diagram below shows desired aggregate expenditure for a hypothetical economy. Assume the following features of this economy:

marginal propensity to consume = 0.65. net tax rate = 0.2. marginal propensity to import = 0.35. fixed price level.

What is the marginal propensity to spend in this economy? Please show your steps.

Suppose RBC has a target reserve ratio of 30%. If RBC receives a new deposit of 30, what will be RBC's excess cash reserves after this new deposit of 30? Please show your steps.

If all the banks in the banking system collectively have 70 in new deposit, and have a target reserve ratio of 6%, what is the maximum amount of deposits the entire banking system can support? Please show your steps.

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