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Need help with the questions from 1 to 3. Also, there is no missing link, data or information and pls explain the answer. 1. Assume

Need help with the questions from 1 to 3. Also, there is no missing link, data or information and pls explain the answer.

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1. Assume the following modified Keynesian model: Y = C + I + G + X IM equilibrium condition in a 4-sector model where: C = 150 + 0.9DI consumption function I = 150 autonomous investment G = 100 autonomous government spending X = 100 autonomous exports IM = 200 autonomous imports And also: DI = Y T + Tr T = 0 autonomous taxes Tr = 0 autonomous transfer payments YF = 5000 fullemployment Y a. Suppose that full-employment (YF) equals 55000. Is there a recessionary or inflationary output gap? b. How much is the gap equal to? c. Suppose the government chooses to eliminate the gap by using expansionary fiscal policy (i.e., decreasing taxes specifically). Given the numbers above, by how much would taxes need to decrease to achieve the goal of fullemployment? 2. Use the following information to answer the question below. Assume the national debt equals $0 prior to Year 1. Gavernment Spending Transfer Payments Tax Revenue Year 1 $500 $200 5900 Year 2 $600 $200 $800 Year 3 $600 $300 $800 Year 4 $700 $300 $900 Year 5 $700 $400 51000 Year 6 $800 $400 $1000 Year 7 $800 $500 $1000 a. What is the federal budget position in year 4? b. What is the value of the national debt at the end of year 7? 3. Use the AD/AS model to illustrate the following. Draw 7 graphs. Show how the AD or the AS curve shift and in what direction (left or right). Also state (and show) what happens to equilibrium real GDP (Y), unemployment, and the equilibrium price level. a. an increase in government spending and/or transfer payments b. restrictive fiscal policy

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