Use the following macroeconomic model to answer the questions from 1 through 11:

C = 115 + 0.75Yd; C = consumption function; Yd (Y-T) = disposable income I = 150; I = Investment

G = 200; G = Government expenditure

T = 100; T = Tax revenue

X = 40; X = Export

M = 30; M = Import

Also assume that Yf = Full employment GDP (Potential GDP) = 2,000

1. Estimate the equilibrium GDP level (income, Ye) ______

2. Estimate the level of aggregate consumption (C) _______

3. Estimate the level of aggregate saving (S) ______f

5. The expenditure multiplier for the economy is __________

6. The tax multiplier for the economy is ____________

7. Given the value of full employment level of GDP above, the GDP gap is ______

8. The government spending needed to bridge the GDP gap you found in statement 7 above would be __________

9. If the export value increases to 60 due to decrease in the value of US $, other things staying the same, then the answer to Question 1 would be ----

10. In addition to increase of export value in statement 9 above, if the import value decreases to 20 for the same reason, other things remaining the same, then the answer to Question 1 would be ----

11. In statement 8 above, the GDP gap and recessionary gap are respectively ____and___

12. Illustrate your answers from 1 through 8 in a graph of 45-degree equality line, similar to the Figure 8.5 in section 8.3.6 in this chapter