Suppose that the following data describes the economy of Saskatchewan: Marginal

Question

Suppose that the following data describes the economy of Saskatchewan:

Marginal propensity to consume, MPC          0.6

Marginal propensity to import, MPIm           0.35

Proportional rate of taxes, t                             0.2

Autonomous consumption, a                           400 billion

Government expenditure, G                            900 billion

Investment expenditure, I                                 800 billion

Exports, X                                                          150 billion

Part 1: What is the value of the multiplier?

Part 2: What is the value of total autonomous expenditure?

Part 3: What is the value of equilibrium national income, Ye?

Explanation / Answer

Suppose that the following data describes the economy of Saskatchewan: Marginal

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