Answer to Question #328063 in Macroeconomics for Macroeconomics

Question

An economy is currently in equilibrium. The following figures refer to elements in the national

income accounts.

$ Billions

Consumption (total) 60

Investments 5

Government expenditure 8

Imports 10

Exports 7

g. Given an initial level of national income of $80 billion, now assume that spending on exports

rises by $4 billion, spending on investment rises by $1 billion, whilst government expenditure

falls by $2 billion. By how much will national income change?

Answer 1

The sum of C G I and NX is 70, GDP is 80, it means that multiplicator is 1,14, so after changing of some argument we will have $73 \cdot 1,14 = 83,22$