Question

i need help wif E, F and G

Structured 1. An economy is currently in equilibrium. The following figures refer to elements in the national income accounts. S Billions Consumption (total) 60 Investments Government expenditure 8 Imports Exports a. What is the current equilibrium level of national income? (5mks) b. What is the level of injections? (5mks) c. What is the level of withdrawals? (2mks) d. Assuming that tax revenues are $7 Billion, How much is the level of savings? (5mks) e. If national income now rose to $80 billion and as a result, the consumption of domestically produced goods rose to $58 billion, what is the mpe? (5mks) f. What is the value of the multiplier? (5mks) g. Given an initial level of national income of $80 billion, now assume that spending on exports rises by $4 billion, spending on investment rises by $1 billion, whilst government expenditure falls by $2 billion. By how much will national income change? (3mks)

could u please do Question 1A B C D E F G

Answer 1

Ans )

(e) 0.725

MPC is calculated as :

MPC = (Change in consumption)/(Change income)

= 58/80

MPC = 0.725

(f)  

Multiplier is calculated as:

Multiplier = 1/(1 - MPC)

= 1/(1 - 0.725)

Multiplier = 3.64

(g)  

Initial level of national income = $80 billion

Change in spending on exports = $4 billion

Change in investment spending = $1 billion

change in government spending = - $2 billion

  

New level of national income = 80 + 4 + 1 - 2 = $83 billion

change in national income = 83 - 80 = $3 billion

Answer 2

I need help with A, B, C, D