Question: QUESTION 3 (CLO1) Given: C = 600+ 0.8Yd 1 = 500 G = 300 T=200 a) Determine the equilibrium level of income using expenditure

QUESTION 3 (CLO1) Given: C = 600+ 0.8Yd 1 = 500 G

QUESTION 3 (CLO1) Given: C = 600+ 0.8Yd 1 = 500 G = 300 T=200 a) Determine the equilibrium level of income using expenditure and injection-leakage approach b) Calculate the value of multiplier for this economy (6) (3) c) Calculate the equilibrium level of income when there is an increase in investment from 500 to 800 using expenditure and injection-leakage approach. (6) d) Discuss the differences between expansionary fiscal policy and contractionary fiscal policy. (5) (Total: 20 marks)

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