Consider the following economy for which the parameters have been estimated: < P The desired consumption...

 

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Consider the following economy for which the parameters have been estimated:< P The desired consumption C= 500 +0.9YD;< The gross investment / 300;< The taxes are T=0.2Y;< ● ● ● ● ● ● The government purchases G = 500; The imports are IM = 0.3Y; e. The exports are X = 600.< d I a. Calculate the marginal propensity to spend. (2)< b. Calculate the simple multiplier (with government & foreign trade). (1)< Find the equilibrium national income (demand determined). (1) C. d. What is the budget balance in the equilibrium national income (demand determined)? Give the number. Is there a budget deficit, surplus, or do we have a balanced budget? (2) If the government had increased its purchases to G=600, other things being equal, what would be the new equilibrium national income (demand determined)? (1) Consider the following economy for which the parameters have been estimated:< P The desired consumption C= 500 +0.9YD;< The gross investment / 300;< The taxes are T=0.2Y;< ● ● ● ● ● ● The government purchases G = 500; The imports are IM = 0.3Y; e. The exports are X = 600.< d I a. Calculate the marginal propensity to spend. (2)< b. Calculate the simple multiplier (with government & foreign trade). (1)< Find the equilibrium national income (demand determined). (1) C. d. What is the budget balance in the equilibrium national income (demand determined)? Give the number. Is there a budget deficit, surplus, or do we have a balanced budget? (2) If the government had increased its purchases to G=600, other things being equal, what would be the new equilibrium national income (demand determined)? (1)

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a The marginal propensity to spend MPS is the proportion of each additional unit of income that is s... View the full answer