a) Calculate the national income equilibrium.b) Based on your answer in (a), show the aggregate expenditure graph.c) Explain what would happen to the national income equilibrium if the investment changes by RM100 million. (b)Assume that a three-sector economy in Country W. The amount ofautonomous consumption is RM300 million with the proportion of an increasein income that is spent on consumption is 0.5. An induced tax of 20% isimposed by the country. The amount of investment is RM250 million, and theamount of government spending is RM150 million.

Given Information- Autonomous consumption (Ā) is equal to RM 300 million Marginal propensity…

a) Calculate the national income equilibrium. b) Based on your answer in (a), show the aggregate expenditure graph. c) Explain what would happen to the national income equilibrium if the investment changes by RM100 million.

a) Calculate the national income equilibrium. b) Based on your answer in (a), show the aggregate expenditure graph. c) Explain what would happen to the national income equilibrium if the investment changes by RM100 million.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a) Calculate the national income equilibrium.

b) Based on your answer in (a), show the aggregate expenditure graph.

c) Explain what would happen to the national income equilibrium if the investment changes by RM100 million.

(b)
Assume that a three-sector economy in Country W. The amount of
autonomous consumption is RM300 million with the proportion of an increase
in income that is spent on consumption is 0.5. An induced tax of 20% is
imposed by the country. The amount of investment is RM250 million, and the
amount of government spending is RM150 million.

Definition Definition Monetary value of all goods and services produced in an economy during a financial year. National income also refers to the total income earned by the factors of production during a financial year.

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