1. Consider the following information. (Assume no tax, no transfer, no export, and no import)

Output Consumption Investment Savings

800 800 200 -200

1200 1000 200 0

1600 1200 200 200

2000 1400 200 400

2400 1600 200 600

2800 1800 200 800

a) Find Savings for each level of output.

b) Find equilibrium output.

c) What are the values of the MPC and MPS?

2. Consider the following economy. C = 200 + .6Yd I = 55 G = 200 T = 180 YF = 1000 (YF: Output of the economy at full employment) Y = C + I + G

a) What is the equilibrium level of output for this economy?

b) Is the economy at full employment? Why or why not?

c) What is the value of the government's budget?

d) What is the value of the government spending multiplier?

e) What is the value of the tax multiplier?