Question
The following data regarding the performance of country A in 2020: All values are in RM (Millions) Consumption (C) = RM100 million + 0.5 Yd
The following data regarding the performance of country A in 2020:
All values are in RM (Millions)
Consumption (C) = RM100 million + 0.5 Yd
Investment (I) = RM10 million
Government (G) = RM50 million
Tax (T) = 0.2 Y
Based on the previous data, calculate:
- National income level using the AD-AS approach.
- Determine the value of the tax multiplier in this economy.
- Determine the level of national income using the multiplier principle when investment increases by RM20 million.
- Determine the level of deflation or inflation gap for country A if the full employment level is approximately RM290 million.
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