Question
You are given the following information about Zambia's economy: * Each year consumers spend k800 million regardless of the level of their disposable income.In addition
You are given the following information about Zambia's economy:
* Each year consumers spend k800 million regardless of the level of their disposable income.In addition to this k800 million, they always spend 75% of their yearly disposable income.
* Investment is fixed at k250 million.
* Government expenditures are k120 million.
* Net taxes equal k100 million.
* Exports are k170 million.
* Imports are always equal to 15% of the level of disposable income.
(i) How much would Zambia's equilibrium level of output be?
(ii) How much would net exports be when this economy is at equilibrium output?
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