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Consider the simple macro model with a constant price level and demand-determined output. The specific parameter values and collected data are given below for the
Consider the simple macro model with a constant price level and demand-determined output. The specific parameter values and collected data are given below for the following questions: (Assume a linear consumption function.) MPSave=0.12G=150NX=105atYY(potentialGDP)=2000m=0.17I=300YD=0.85YS=50atYD=100 Part a) With the given information above, compute the values of X, autonomous consumption expenditure (=a), net tax rate, MPSpend and simple multiplier. x=a=t= MPSpend (in two decimal places) = Simple multiplier (in two decimal places) = Part b) Using the given information and values found above, compute the total autonomous expenditures and equilibrium GDP. Total autonomous expenditure = Ye (in two decimal places) = Part c) Suppose the government attempts stabilize actual GDP at the given value of Y, with the given G. Compute the new net tax rate for the fiscal stabilization policy. New t= Part d) Suppose the new net tax rate of 0.09 has successfully stabilized actual GDP at the given value of Y. Compute the desired consumption, APS and public savings. Desired consumption = APS = Public savings_=
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