Assume a closed economy where the level of I is 300, G=T=150 and the savings function is S= −30 + 0.15Yd Where S is savings, I is investment, G is government expenditure, T is taxes and Yd is disposable income.
Assume a closed economy where the level of I is 300, G=T=150 and the savings function is S= −30 + 0.15Yd Where S is savings, I is investment, G is government expenditure, T is taxes and Yd is disposable income.
i) Calculate the equilibrium level of income.
ii) What will be the increase in
iii) Suppose government reduced taxes by 100 in this economy, what would be the change in national income?
Iv) illustrate (iii) above using a well labelled diagram of the Keynesian cross.
The following data relate to an emerging African country.
Item Value('000) KSHS
GNP 8,000,000
Indirect Business Taxes 80,000
Gross Investment 400,000
Total population 30,000
Consumption 10,000
Personal Income Taxes 800
Excise duty 80
Personal Income 89,000
Net factor incomes from abroad 200,000
Using the above data, calculate:
i) Net National Product
ii) GNP per capita
iii) Net investment
iv) Disposable personal income
v) Gross domestic product
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