Question: (a) Given the structural equations for an economy to be C = 50, T = 50. I. II. III. 50+ 0.80y, I = 50,

(a) Given the structural equations for an economy to be C =

(a) Given the structural equations for an economy to be C = 50, T = 50. I. II. III. 50+ 0.80y, I = 50, G = Calculate and interpret the value of the investment multiplier, government spending multiplier and tax multiplier. (5 marks) Find the equilibrium level of Income. (5 marks) Calculate the new level of income when government increases its spending to 70. (5 marks)

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