The government can take a role through fiscal policy in improving the economy. Way

which is commonly taken is changing government spending (G) and net tax (T).

Consider the following data (in trillion rupiah): Consumption function C = 200 + 0.8 Yd. Investment I =

500. Government expenditure (G) = 400 and net tax (T) = 300.Based on the data above:

a. Find the sum of equilibrium aggregate expenditure and equilibrium consumption.

b. Recently the government has been aggressively inviting foreign investors, for example Tesla

(electric car) so that the investment value rose by 40%, how will that affect

social welfare as reflected by changes in equilibrium consumption and

equilibrium aggregate expenditure? Draw a curve depicting position

aggregate output before dam after the increase in investment.

c. If every 1% of economic growth could reduce unemployment 0.25%

then what percentage of unemployment can be reduced due to an increase in investment

mentioned above?

d. If the government targets economic growth of 5% in a way

increase the expenditure (G) by 10%, will this target be achieved? If

No, what additional steps do you think should be taken? Explain.