Answer to Question #146663 in Macroeconomics for Prince Chauke

Question

The following information is provided about an open economy with a government. Use the
information to answer the questions that follow:

C = 450 + 0.4Y
I = 350
G = 150
X = 70
Z = 35 + 0.1Y
T = 0.15Y
Yf = 1550

Q.2.1 Calculate the level of autonomous spending in this economy.
Q.2.2 Calculate the size of the multiplier
(Note: Round your answer to two decimal places)
(4)
Q.2.3 Calculate the equilibrium level of income
(Hint: use the multiplier method)
Q.2.4 Calculate the tax revenue to the government of this country when the economy
remains in equilibrium.
(2)
Q.2.5 Calculate what the new equilibrium income should be if the government of this
country decides to cancel all taxes, implying the tax rate would now be 0%.
(6)
Q.2.6 Before the government decreased the tax rate, how much of government
spending was required to bring the economy to full employment?
(4)

Answer 1

Dear Prince Chauke, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order