Answer to Question #135832 in Macroeconomics for Rika

Question

Consider the following information to answer questions 3.8 to 3.12:

Government spending = R450
Exports = R250
Autonomous consumption = R300
Autonomous imports = R150
Investment expenditure = R100
Marginal propensity to consume = 0,6
Full employment level of income = R2 800

3.8 Autonomous expenditure (Ᾱ) is equal to
[1] R1000.
[2] R950.
[3] R1 150.
[4] R800.58

3.9 What is the marginal propensity to save?
[1] 1
[2] 1.60
[3] 0.60
[4] 0.40

3.10 What is the value of the multiplier?
[1] 2
[2] 2.50
[3] 1.50
[4] 1.80

3.11 What is the equilibrium level of income Y*?
[1] R1 600
[2] R2 375
[3] R1 800
[4] R2 000

3.12 By how much must investment spending increase to bring about full employment?
[1] R300
[2] R200
[3] R150
[4] R170

Answer 1

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