You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below.                                                     Government expenditure                                            400   Exports 250   Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75   Marginal propensity to import 0.15 Source: Bester, N. 2017.  Tax rate 0.25       5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used.         5.2 Calculate autonomous spending. Show all formulas and calculations used 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal.

MACROECONOMICS
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ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
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Silesia 

You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below.

                                                    Government expenditure                                            400

 

Exports

250

 

Autonomous imports

50

Autonomous consumption

150

Investment Expenditure

300

Full-employment output

2040

Marginal propensity to consume

0.75

 

Marginal propensity to import

0.15

Source: Bester, N. 2017. 

Tax rate

0.25

 

 

 

5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used.      

 

5.2 Calculate autonomous spending. Show all formulas and calculations used

5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final

answer to 1 decimal.          

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