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1. Assume that in an economy the autonomous expenditure is 960, the income- expenditure multiplier is 5, C = 1800, T= 500 a) Find the

1. Assume that in an economy the autonomous expenditure is 960, the income- expenditure multiplier is 5, C = 1800, T= 500 a) Find the short run equilibrium output. (5 marks) b) Find the value of the tax multiplier. (5 marks) c) Find the change in equilibrium output if the government cuts net taxes by 20? (7 marks) d) How much is the consumption after the cut in taxes

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