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Consider the following infomation for Mexico.

Autonomous Consumption | 330 |
---|---|

MPC | 0.9 |

Tax Rate | 0.05 |

Investment | 800 |

Government Expenditure | 100 |

Exports | 40 |

MPI | 0.4 |

What is the equilibrium level of GDP in the income-expenditure model?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

Suppose that there is an increase in Government Expenditure by $40.

What is the new equilibrium level of GDP in the income-expenditure model?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

What is difference between the original and new level of GDP as a result of an increase in Government Expenditure?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity