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Consider the following economy:
Autonomous Consumption = 600
Autonomous Taxes = 800
Planned Investment = 1,050
Government Expenditure = 820
Autonomous Net Exports = 80
Marginal Propensity to Consume = 0.65
Marginal tax rate = 0.08
Marginal propensity to import = 0.02
Calculate the equilibrium level of economic activity

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Consider the following economyAutonomous Consumption = 600Auton.pdf

  • 1. Consider the following economy: Autonomous Consumption = 600 Autonomous Taxes = 800 Planned Investment = 1,050 Government Expenditure = 820 Autonomous Net Exports = 80 Marginal Propensity to Consume = 0.65 Marginal tax rate = 0.08 Marginal propensity to import = 0.02 Calculate the equilibrium level of economic activity