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Consider an economy with following data: C= 425 + .85YD T = 100 + .2 Y Ig = 1800 G = 2650 NX = -500

Consider an economy with following data:

C= 425 + .85YD

T = 100 + .2 Y

Ig = 1800

G = 2650

NX = -500

  • Calculate the multiplier ?
  • Calculated the Autonomous Spending (A)?
  • Calculate the level of GDP (Y)?
  • Calculate the level of GDP if government increases G and T by $50.

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