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5. Given is the information of an economy. Consumption (C) = 700 + 0.7Yd Investment (1) = 450 Government Expenditure = 500 Tax (T) =
5. Given is the information of an economy. Consumption (C) = 700 + 0.7Yd Investment (1) = 450 Government Expenditure = 500 Tax (T) = 350 Export (X) = 400 Import (M) = 300 (All values are in RM million) Based on the information, answer the following questions. b) Find the value of Marginal Propensity to Save (MPS). Derive the saving function from the consumption function. d) Calculate the equilibrium level of national income using the aggregate expenditure- aggregate supply approach. e) If the full employment level of income is RM4000 million, is there an inflationary or a deflationary gap?. Draw a graph to show the situation
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