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Answer to Question #996 in Macroeconomics for psj

Question #996
Is it true of false? why? & If the real interest rate on government debt is equal to the growth rate of real GDP, reductions in the debt-to-GDP ration require the governmnet to run primary budget surpluses.& & ---------------------------------------------------------------& & You are given the following expenditure functions.& Consumption, c=30+0.9DI& Investment, I=40& Government, G=20& Taxes, T=0.2Y& Exports, X=20& Imports, IM=0.12Y& & Assume the aggregate price level remains constant.& a. what is the equation of the aggregate expenditure function?plot it in a diagram. what is the total autonomous expenditure in the economy?& & b.what is the slope of the AE function?how does the slope change when 1. MPC changes 2. the tax rate changes 3. marginal propensity to import changes& & c. calculate the equilibrium level of real national income& d. what is the multiplier? & e. suppose that the government decides to increase G by 10. What will be the effect of this on equilibrium national income?
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