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Hi there. I'm having trouble to solve this macroeconomics question. Please help me in this. Humbly requesting pls help. Question 1 The following information relates

Hi there. I'm having trouble to solve this macroeconomics question. Please help me in this. Humbly requesting pls help.

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Question 1 The following information relates to Country Z. Consumption function C = $20,200 + 0.75 Yd Investment function I = $5,800 Government expenditure function G = $10,000 Tax function T = $8,000 Disposable national income Yd Full employment national income Yf = $120,000 (a) Using the information given, determine the equilibrium national income. (4 marks) (b) With reference to part (a), state the type of equilibrium that the country faces and illustrate this equilibrium with an AE-output diagram. Note: Please ensure that the diagram is clearly labeled. (4 marks) (c) Country Z carries out survey from time to time to understand its households. In a recent survey, some households are found to be worried of future inflation. As a result, they change their consumption spending by $6,800. Another group of households is less concern. They forecast future income growth to be strong. This leads them to change their consumption spending by $1,200. Using the multiplier formula, calculate the impact of both events (combined) on the country's national income. Find the change in equilibrium national income and state the new equilibrium national income. (5 marks) (d) How do the events in part (c) affect the country's CPI and cyclical unemployment? Briefly describe. (4 mark) (e) With reference to your answer in part (c), would you advise the government to implement an expansionary fiscal policy? Briefly explain your answer. (3 marks) (Total: 20 marks)

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