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    An economy is currently in equilibrium. The following figures, in billions, refer to elements in its national income accounts:

    Consumption (total): £25
    Investment: £5
    Government expenditure: £5
    Imports: £5
    Exports: £10

    A)Current equilibirum level of national income?
    b)Level of injections
    c)level of withdrawls
    D)Assume the level of saving is £5 billion. What is the level of tax revenue?
    e) If national income now rises to £60billion and, as a result, the consumption of domestically produced goods rises to £30 billion, what is the marginal propensity to save?
    F)f) What is the value of the multiplier?

    a) so Y(national income)= C + I + G +(N-X)

    =25 + 5 +5 + (10-5)
    =40 billion pounds

    b)injections= investment, gov spending, exports= 20 billion pounds

    c)withdrawals= imports, tax, savings ( you only show imports so I'm assuming) 5 billion pounds

    NB net injection is injections-withdrawals= 15 billion pounds

    d) unsure, i don't think i understand this one

    e) so income rises by 20 billion, and consumption by 5 billion, so mpc (consume) = 5/20=0.25

    thus mps (save) = 1-0.25= 0.75

    f) multiplier = 1/1-c (c being mpc)
    = 1/0.75
    = 1.333 (4/3)

    hope this helps, give some rep if you think it did!
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