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1. Given: (3 = 15K: 0.3 Y [3+3+3+4+3+3+4=13} I = 159 G = 300 TR = l = l f=E125 i} Find the equilibrium level
1. Given: (3 = 15K: 0.3 Y [3+3+3+4+3+3+4=13} I = 159 G = 300 TR = l = l f=E125 i} Find the equilibrium level of income. ii} Suppose, because of the current CUR-Tl} 19 situation 5 falls to SD, MP3 fails to .05: 1 falls to It). G falls to 101] and HE falls to It]. How much TR should the government increase to have the same level of equilibrium income as in part i}? iii} En determining the required change in TE in part ii}= which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVE] 19 situation in selecting the multiplier}. iv} Draw a graph to show the appropriate changes between part i] and part ii). v} IClive an example related to current Bangladeshi situation where the government may follow a 'Transfer Promoting Policy' instead of a 'Growth Promoting Policy' in determining who gets the transfer payment. vi} Enstead of paying transfer {TR} if the government were to increase government spending {G}. what type of crowding out would you expect? Briey explain. vii}As we have observed recently that a lot of the assistance from the government is being misappropriated hy dishonest individuals and as a result is not reaching the target population. 'What role can proper institution play to rectify such mishandling of government fund? Explain
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