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Suppose that there is an economywith C=100+0.8Yd I=50 T=100 G=40 A) What is the equilibrium level of output? B) At the equilibrium level of output

Suppose that there is an economywith

C=100+0.8Yd I=50 T=100 G=40

A) What is the equilibrium level of output?

B) At the equilibrium level of output in A), whatarethevaluesofconsumption and savings?

C) Calculate the government expenditure multiplier and tax multiplier in this economy?

D) If the government wants toincreasethe national income to 800, I) Calculate how much the government spending should be changed, II) Calculate how much tax would have to change.

E)Base the information in A), what is the government deficit or surplus?

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