Section B 5. Consider the following short-run macroeconomic model: AE =C+I+G+X - IM C = 5, 000 + 0.80YD / = 30, 000 G = 35, 000 7 = 0.30Y X = 20, 000 IM = 0.16Y YD = Y - T a) (5 marks) Calculate the equilibrium level of national income in this economy. b) (2 marks) Calculate the government's budget balance. c) (2 marks) Calculate the country's trade balance. d) (4 marks) Calculate the simple multiplier for this economy. What is the economic significance of the multiplier? e) (5 marks) The government is considering two policies to increase GDP. Either a reduction in the tax rate to 7 = 0.15Y or a "buy Canada" law that would reduce the marginal propensity to import to IM = 0.06Y. Which would you recommend and why? f) (2 marks) How might your answer change if the second policy caused other countries to retaliate against Canada with their own "buy domestic" campaign, causing our exports to fall