Answer to Question #129328 in Microeconomics for Kevin

Question

Q.4.1 Calculate the level of autonomous spending.
Q.4.2 Calculate the size of the multiplier.
Q.4.3 Calculate the equilibrium level of income.
Q.4.5 Discuss the relationship between total income and total spending in the macroeconomy according to Say’s law.
Question 5
(Marks: 15)
(3) (3) (2) (3)
(4)
(Marks: 10)
Theinformationbelowrelatestoaclosedeconomywithoutagovernment.Usetheinformationto answer the questions that follow:
• Autonomous consumption = R285 million;
• Autonomous investment = R300 million;
• Marginal propensity to consume = 0.4.

Answer 1

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