Question: QUESTION 15 Answer the following questions using the aggregate expenditures model of the economy described below. C = 800 + 0.6 Yd T = 170

QUESTION 15

Answer the following questions using the aggregate expenditures model of the economy described below.

C = 800 + 0.6 Yd

T = 170

I = 350

G = 300

X = 200

M = 0.05 Y

(a)What are the marginal propensity to consume_______,and the marginal propensity to import______

(b)What is the marginal propensity to save? _______

(c)The saving function is:S =______+______Yd.

(d)What is the value of Ye? _____

(e)What is the size of the multiplier? _______

(f)Suppose the full employment level of real GDP is 4,090.What is the size of the(-) recessionary gap or(+) inflationary gap (ye-yf)?(Include the negative sign for recessionary gap)________

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