Assumes that the marginal propensity to consume in Maldives is 0.9. For the next year it is estimated that the economy would receive investments worth of RF 50 million, government would purchase goods and services worth of RF 40 million, and taxes would be RF 40 million. Assumes exports and imports to be zero. 

Questions:

If the government cuts its expenditure on goods and services by 30 million, what would be the change in equilibrium expenditure now?                                   

The government decided to purchase RF 40 million worth of goods and services, and to cut taxes to RF 30 million. What would be the change in equilibrium expenditure now?                                                                                                                                                            

The government simultaneously decided to cuts its’ both purchase of goods and services and taxes to RF 30 million. What would be the change in equilibrium, expenditure now?