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1. Consider an economy in which all taxes are autonomous and the following values oof autonomous consumption, planned investment, government expenditure, autonomous taxes, and the marginal propensity to consume are given: Ca=1,400 Ip=1,800 G=1,900 Ta=1,750 c=0.6
a. What is the level of consumption when the level of income (Y) equals $10,000?
b. What is the level of saving when the level of income (Y) equals $10,000?
c. What is the level of planned investment when the level of income(Y)equals $10,000? What is the level of actual investement? What is the level of unintended inventory investment.
d. Show that injections equal leakages when income (Y) equals $10,000.
e. Is the economy in equilibrium when income (Y)=$10,000? If not, what is the equilibrium level of income described in this question.
f. Is there a surplus or deficit in the government budget at the equilbrium level of income? How much?
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