Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m Government Spending R300m Imports R175m + 0.08Y Exports R283m Taxes = 0.1Y Full employment level of output is R3 483m Q.4.2.1 Calculate the equilibrium level of income in this economy. (Note: Show all your calculations and round off to two decimal places.) Q.4.2.2 A portion of the imports of a country are related to the level of income in the economy. Calculate the value of induced imports in t economy, given the equilibrium level of output. Q.4.2.3 Calculate the change in government spending that could move this economy to the full employment level of output.
Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m Government Spending R300m Imports R175m + 0.08Y Exports R283m Taxes = 0.1Y Full employment level of output is R3 483m Q.4.2.1 Calculate the equilibrium level of income in this economy. (Note: Show all your calculations and round off to two decimal places.) Q.4.2.2 A portion of the imports of a country are related to the level of income in the economy. Calculate the value of induced imports in t economy, given the equilibrium level of output. Q.4.2.3 Calculate the change in government spending that could move this economy to the full employment level of output.
Chapter1: Making Economics Decisions
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Transcribed Image Text:Q.4.2 The following information is provided for an open economy with a government.
Use the information to answer Q.4.2.1 to Q.4.2.3
(Note: Round off your answers to two decimal places):
Autonomous Consumption
R535m
Marginal propensity to consume is 0.75
Investment Spending
R322m
Government Spending R300m
Imports R175m + 0.08Y
Exports R283m
Taxes = 0.1Y
Full employment level of output is R3 483m
Q.4.2.1 Calculate the equilibrium level of income in this economy.
(Note: Show all your calculations and round off to two decimal
places.)
Q.4.2.2 A portion of the imports of a country are related to the level of
income in the economy. Calculate the value of induced imports in this
economy, given the equilibrium level of output.
Q.4.2.3 Calculate the change in government spending that could move this
economy to the full employment level of output.
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