How monetary policies would get economy to full employment

Reference no: EM13221035

1. Given the following model: Y = C + I + G + (X-M) Question 1 Suppose that: Autonomous Consumption = $500 MPC = 0.75 Taxes = $400 Investment = $500 Government Spending = $1200 Exports = $300 Imports = $500 Find the following: A. Equilibrium income B. Equilibrium consumption C. Equilibrium saving D. Write the savings function E. Show that injections equal withdrawals

2 Suppose that full employment GNP (FE Y) is = 4000 A. Explicitly find the necessary change in G to get the economy to full employment GDP. B. Explicitly find the necessary change in Taxes to get the economy to full employment GDP.

3 Given the position of the economy in question one and that full employment GDP = 4000 explain how the following monetary policies would get the economy to full employment GDP.

Reference no: EM13221035

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