Question
Consider the following economy and use the Keynesian model to answer the succeeding questions. [Tip: Round answers off by two decimals. Final values expressed in
Consider the following economy and use the Keynesian model to answer the succeeding questions. [Tip: Round answers off by two decimals. Final values expressed in millions of Rands]. C = 350mil + 0.85Yd = 175mil = 300mil = 170mil = 120mil T = 0,15Y Yf = R3100 million Equilibrium Income: Y = C + I + G + (X-Z) Disposable Income: Yd = (1-t)Y 4.1 What is the value of the marginal propensity to consume in this model? 4.2 Calculate the multiplier. 4.3. Calculate the equilibrium level of income by hand of the calculated value of the multiplier in (4.2.).4.4 How much does the government collect in taxes when the economy is in equilibrium? 4.5 How will the multiplier and the equilibrium level of income change by including induced imports (m = 0.17)?
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