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explain it briefly The country of Timbuktu has an economy characterized by the following equations; C= 70 + 0.8Yd T = 0.2Y 1 = 100

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The country of Timbuktu has an economy characterized by the following equations; C= 70 + 0.8Yd T = 0.2Y 1 = 100 G = 200 X = 75 IM = 0.2Y a. Compute the aggregate expenditure function and plot it in a well labelled diagram. What is the total autonomous spending? (3 marks) b. What is the slope of the aggregate expenditure function? (1 marks) c. Compute the equilibrium national income (2 marks) d. What is the simple multiplier in this model and what is its interpretation. (2 marks) e. Suppose government purchases increase by 100, and at the same time, investments decrease by 50, what will be the effect on equilibrium national income. (2 marks)

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