# Assignment 1 questions 28, 29.pdf - Q e ion 28(8 poin Using...

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QXeVWion 28: (8 poinWV) Using the information below for a four sector economy, calculate the following: C = 750 + 0.6 Yd T = 100 + 0.15 Y I = 450 + 0.2 Y G = 200 + 0.1 Y X = 300 M = 350 + 0.15 Y Yf = 3,544.62 Yd = Y-T (Assume price remain constant) ParW 1 : What is the value of Ye?____________ ParW 2: What is the value of the Govt surplus(+)/deÀcit(-) at Ye? ____________ ParW 3 : What is the size of the positive(+)/negative(-) output gap? ____________ ParW 4 : What change in government spending (increase(+)/decrease(-) is required to close the gap? ____________ ParW 5 : Suppose that government spending changes to G'=300 + 0.05 Y. What is the value of the new equilibrium income (Ye2) ?____________ Using the new government spending function in Part 5, calculate the following: ParW 6 : What is the size of the positive(+)/negative(-) output gap ? ____________ ParW 7 : Change in government spending (increase(+)/decrease(-) required to close the new gap ?____________ ParW 8 : What was the value of the Govt surplus(+)/deÀcit(-) at Ye2? (Before the change that took place in part
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