Question 3

Use the Macroeconomics Data in Queens Republic and answer the questions below. Calculate the following questions (give your answers in million where applicable). Round your answer off to three decimals. Queens Republic Macroeconomics

Data Values:

Autonomous consumption R80 million

Autonomous investment R50 million

Autonomous net exports R70 million

Autonomous government expenditure R120 million

Marginal propensity to consume C 0.8

Proportional tax rate t 0.2

Full employment level of income R1000 million

3.1 Calculate total autonomous expenditure. (3 Marks)

3.2 Calculate the value of the multiplier. (3 Marks)

3.3 Calculate the equilibrium level of income. Round your answer off to three decimals. (3 Marks)