MBA 5312 Macroeconomics Duration: 2.5 Hours Spring, 2021 Exam # 2 Answer ALL of the following questions (10 points each): 1. In a closed economy such that: C2200+0_9(Y7T) Md:0.20Y40R 1:300-20R MS:$400 G = $200 T = $200 a. Solve for the equilibrium values of Y and R. b. If both government spending and taxes increase by $10 each, What happens to the national income? Does the balanced budget multiplier theorem hold? 0'9\" In a closed economy such that: C2100+0_8(Y7T) Md:0.25Y50R 1:70040R M5:$500 G:$600 T:$500 Solve for the equilibrium values of Y and R. . If money supply increases by $100, what happens to the national income? What is the money supply multiplier? . Suppose money supply increases by $50, use your answer to section (b) to determine the change in the national income. Consider an open economy described by the following equations: C=400+0.90(Y7T) X=100-0.10Y I:$300 G:$200 T=$lSO a. What is the equilibrium level of national income? b. If both government spending and taxes increase by $10 each, what happens to the national income? Does the balanced budget multiplier theorem hold? 4. In an open economy such that: C = 100 + 0.90 (Y - T) M = 0.40 Y - 20 R I = 20 - 10 R MS = 100 + BP X =30 - 0.10 Y BP = X + K T = 40 K = 10 + 5R G = 50 a. Determine the equilibrium levels of Y and R. b. If G increases to $100, what are the new Y and R? What is the government spending multiplier?5. In an economy such that: C=200 + 0.80 (Y - T) M = 0.20 Y - 10 R I = 40 - 20 R MS = 200 + BP X = 30 - 0.05 Y BP = X + K T = 100 K = 20 + 10R G = 150 a. Determine the equilibrium levels of Y and R. b. If T increases to $150, what are the new Y and R? What is the tax multiplier