Consider the following information about an economy.

C=100+b(Y-50-0.25Y);

I=50,

G=50,

X=10,

M=5+0.1y,

t=0.25Y,

MPC=0.8

a. Find equilibrium national income 

b. Find the foreign trade multiplier 

c. What components are excluded in calculating national income and why? [

d. What is the effect of an increase in t of 0.3 on the equilibrium income and the multiplier?

Answer rating: 100% (QA)

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