NATIONAL INCOME Consider an economy in which the price level is equal to one and the goods
Question:
NATIONAL INCOME
Consider an economy in which the price level is equal to one and the goods and money markets are described by the following equations:
Money Supply (Ms) =100
Consumption (c) =500+0.2(Y-T)
Investment (I) =60+0.5Y-10i
Money Demand (Md) =Y+90-10i
Export (X) =20
Imports (M) =40
Government Spending (G)=Taxes (T)=200
Use the above information to answer question 15 to 20
16. Calculate the equilibrium level of income *
17. Calculate the equilibrium level of investment *
18. Calculate the equilibrium level of consumption expenditure *
19. Calculate the equilibrium level of interest rate *
20. Suppose government taxes increases to 400. Compute the fiscal policy multiplier *