Keynesian cross" exercises

Let the economy in our numerical example be:

C = 70 + 0.75Y

I = 60

Y* = 520

Exercise 1:

Add government spending G = 100, not financed by taxes

by taxes

Show

that the new equilibrium income is: Y = 920

What is the government spending multiplier?

Exercise 2 :

Redo your work assuming that:

1. government spending (G: 100) is financed (in part) by a per capita tax

1. public spending (G: 100) is financed (partly) by a per capita tax (capitation) whose total amount is T=80 and,

2. the marginal propensity to consume is applied to disposable income

Calculate the new equilibrium income (Y2) and the disposable income (Y ;)

What is the multiplier for the government's balance?

Exercise 3:

If government spending is financed by a 10% income tax and the

propensity to consume is applied to disposable income, calculate the equilibrium income (Y2*)

(Y2*) and disposable income (Y;)

In this case, what is the government's balance of payments multiplier?