3. consider the expanded national incomes models for closed and open economy are Y = C+1+G and Y C+I+G+X-M respectively. Given further the information below, answer the following questions: i) Marginal propensity to consume is 0.8 and C(0) = N$1600 ii) Marginal rate to tax is 0.1 and T(0) = N$100 iii) Marginal propensity to import is 0.12 M(0) = N$200 iv) Marginal propensity to export is 0.25 X(0) = N$1000 v) Government expenditure is G = N$800 and investment is 1 = N$502.50 a) Consumption, savings, tax, import, and export functions out of national income. Also, find consumption and savings out of disposable income. b) Value of national income for both closed and open economy c) the corresponding multipliers for a closed and open economy and provide the economic intuition derived from the two. d) The difference in growth of the economy if government expenditure (fiscal stimulus) increases by N$1000 given the two multipliers from c) and provide the economic intuition derived from the two.

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3. consider the expanded national incomes models for closed and open economy are Y = C+I+G
and Y=C+I+G+X-M respectively. Given further the information below, answer the
following questions:
i) Marginal propensity to consume is 0.8 and C(0) = N$1600
ii) Marginal rate to tax is 0.1 and 7(0) = N$100
iii) Marginal propensity to import is 0.12 M(0) = N$200
iv) Marginal propensity to export is 0.25 X(0) = N$1000
v) Government expenditure is G = N$800 and investment is I = N$502.50
a) Consumption, savings, tax, import, and export functions out of national income. Also, find
consumption and savings out of disposable income.
b) Value of national income for both closed and open economy
c) the corresponding multipliers for a closed and open economy and provide the economic intuition
derived from the two.
d) The difference in growth of the economy if government expenditure (fiscal stimulus) increases by
N$1000 given the two multipliers from c) and provide the economic intuition derived from the two.
Transcribed Image Text:3. consider the expanded national incomes models for closed and open economy are Y = C+I+G and Y=C+I+G+X-M respectively. Given further the information below, answer the following questions: i) Marginal propensity to consume is 0.8 and C(0) = N$1600 ii) Marginal rate to tax is 0.1 and 7(0) = N$100 iii) Marginal propensity to import is 0.12 M(0) = N$200 iv) Marginal propensity to export is 0.25 X(0) = N$1000 v) Government expenditure is G = N$800 and investment is I = N$502.50 a) Consumption, savings, tax, import, and export functions out of national income. Also, find consumption and savings out of disposable income. b) Value of national income for both closed and open economy c) the corresponding multipliers for a closed and open economy and provide the economic intuition derived from the two. d) The difference in growth of the economy if government expenditure (fiscal stimulus) increases by N$1000 given the two multipliers from c) and provide the economic intuition derived from the two.
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