National income accounting (GDP calculate) is an essential part of macroeconomics. Analyse the following hypothetical economy and answer the questions that follow: G = 400, I = 70, X = 300, M =100, autonomous consumption = 100, MPC = 0.6, taxes=50 Calculate the level of national income in this economy What percentage of disposable income do people save? Calculate the level of savings Show that in this economy, injections are indeed equal to withdrawals
National income accounting (GDP calculate) is an essential part of macroeconomics. Analyse the following hypothetical economy and answer the questions that follow: G = 400, I = 70, X = 300, M =100, autonomous consumption = 100, MPC = 0.6, taxes=50 Calculate the level of national income in this economy What percentage of disposable income do people save? Calculate the level of savings Show that in this economy, injections are indeed equal to withdrawals
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 1.1P
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Question
G = 400, I = 70, X = 300, M =100, autonomous consumption = 100, MPC = 0.6, taxes=50
Calculate the level of national income in this economy
What percentage of disposable income do people save?
Calculate the level of savings
Show that in this economy, injections are indeed equal to withdrawals
Calculate the multiplier?
Using the multiplier in v above, what would be the new level of national income if government spending rose to 500?
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