The following information is provided about an open economy with a government. Use the  information to answer the questions that follow: Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million Exports = R150 million Autonomous imports = R100 million Marginal propensity to consume =2/3 Tax rate = 1/10 Marginal propensity to import = 1/10 Yf = R2 150 million Q.1.1 Calculate the level of autonomous spending in this economy. (2) Q.1.2 Calculate the size of the multiplier. (3) Q.1.3 Calculate the equilibrium level of income. (2) Q.1.4 Calculate the change in government spending required to reach full employment  in the economy. (3

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

The following information is provided about an open economy with a government. Use the 
information to answer the questions that follow:
Autonomous consumption = R100m
Investment spending = R300m
Government spending = R200 million
Exports = R150 million
Autonomous imports = R100 million
Marginal propensity to consume =2/3
Tax rate = 1/10
Marginal propensity to import = 1/10
Yf = R2 150 million
Q.1.1 Calculate the level of autonomous spending in this economy. (2)
Q.1.2 Calculate the size of the multiplier. (3)
Q.1.3 Calculate the equilibrium level of income. (2)
Q.1.4 Calculate the change in government spending required to reach full employment 
in the economy.
(3

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Equilibrium Point
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education