Assignment On Macro Economics - 1

Running head: MACROECONOMICS
Macroeconomics
Name of the Student
Name of the University
Course ID

MACROECONOMICS1
Table of Contents
Section A.........................................................................................................................................2
Part 1............................................................................................................................................2
Part 2............................................................................................................................................3
Part 3............................................................................................................................................3
Part 4............................................................................................................................................4
Part 5............................................................................................................................................5
Part 6............................................................................................................................................6
Part 7............................................................................................................................................6
Part 8............................................................................................................................................6
Part 9............................................................................................................................................7
Section B..........................................................................................................................................8
Part 10..........................................................................................................................................8
Part 11..........................................................................................................................................9
Part 12........................................................................................................................................10
Part 13........................................................................................................................................11
Part 14........................................................................................................................................11
Part 15........................................................................................................................................12
Reference list.................................................................................................................................14

MACROECONOMICS2
Section A
Part 1
Income level is given as $450, 179 million.
Income tax rate (MPT) = 28%
Marginal propensity to save (MPS) = 0.4
Marginal propensity to import (MPM) = 0.1
Marginal Propensity ¿ Consume ( MPC )=1−MPS−MPT −MPM
¿ 1−0.4−0.28−0.1
¿ 1−0.78
¿ 0.22
Consumption function
C=a+ bY
C = Consumption
a: Autonomous consumption
b: Marginal Propensity to Consume
Y: Disposable income
C=a+ bY
¿ , 262 ,619.0=a+ 0.22 ( 450,179−56,700 )

MACROECONOMICS3
¿ , 262 ,619.0=a+ ( 0.22×393 , 479 )
¿ , 262,619.0=a+86,565.38
¿ , a=262,619.0−86,565.38
¿ , a=176,053.6
Autonomous consumption is $176,053.6 Million
Part 2
Level of total saving
Saving=Income−Consumption expenditure−Government expenditure
¿ $ 450 , 179−$ 262,619.0−$ 113 , 601.0
¿ $ 73959.0 Million
Part 3
Data related to the economy are as follows
Income level (Y) = $450, 179 million
Consumption Expenditure (C) = $262, 619.0 million
Export expenditure (X) = $99, 804.0 million
Import expenditure (M) = $97, 424.0 million
Formula for equilibrium income is given as
Y =C + I + G+ ( X−M )