Consider an economy in which all taxes are autonomous and the following values of autonomous consumption, planned investment, government expenditure, autonomous taxes, and the marginal propensity to consume are given:
(a) What is the level of consumption when the level of income (Y) equals $10,000?
(b) What is the level of saving when the level of income (Y) equals $10,000?
Ca = 1,400 Ip = 1,800 G = 1,950 Ta = 1,750 c = 0.6
(c) What is the level of planned investment when the level of income (Y) equals $10,000? What is the level of actual investment? What is the level of unintended inventory investment?
(d) Show that injections equal leakages when income (Y) equals $10,000.
(e) Is the economy in equilibrium when income (Y) = $10,000? If not, what is the equilibrium level of income for the economy described in this question? (Y) = $10,000
(f) Is there a surplus or deficit in the government budget at the equilibrium level of income? How much?