You are given the following four-sector Keynesian income model:
E = C + I + G + (X – M)……………………….I = 230
C = 120 + 0.75Yd……………………………… G 5 560
Yd = Y – T……………………………………... X = 350
T = 40 + 0.20Y…………………………………. M = 30 + 0.10Y
Y = E in equilibrium
(a) Calculate the equilibrium income level (Ye).
(b) Calculate the amount of taxes collected when the economy is at Ye. Then indicate whether the government has a surplus or deficit at Ye and calculate the value of the surplus or deficit.
(c) Calculate the value of net exports when the economy is at Ye.