C = c₀ + c₁YD mY

YD = Y t₀ t₁

1. In the contemporary United States, we might guess that the marginal propensity to save is around 10 percent, the marginal tax rate is around 25 percent, and the import share is 15 percent. Given these parameters, what would you estimate the multiplier to be?
2. Suppose that GDP is initially at $20 trillion, and the government increases both final expenditures G and taxes T by $500 billion. Given the parameters from the previous equation, what would the new value of GDP be?