Ountry that has never had its own currency has formed

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Q1. In a private closed economy, the marginal propensity to consume is 0.25, consumption equals income at $120 billion and the level of investment is $40 billion. Illustrate what is the equilibrium level of income

Q2. A country that has never had its own currency has formed a central bank and put you in charge of developing money. It needs to perform the necessary functions of any good currency efficiently (i.e., being a medium of exchange, a store of value and a unit of account). Because your country is interested in trading with other members of the global economy, other nations must have faith in its fitness and the currency exchange marketplaces must be willing to accept it.

Reference no: EM1317846

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