Consider the Egyptos (a hypothetical economy) economy: C = 100 + 0.8Yd Note that Yd = Y – T I = 120 G = 160 T = 100 Calculate the equilibrium value of Y. Show your work and provide graph

1.  Consider the Egyptos (a hypothetical economy) economy: C = 100 + 0.8Yd Note that Yd = Y – T

 I = 120    G = 160     T = 100      

1.  Calculate the equilibrium value of Y. Show your work and provide graphical illustration.

1. Assume YF (full employment level of Y) = $1700. How much change in T should the government make to move the economy to full employment (i.e., to YF)?  Provide numerical and graphical answers (use the graph in part A). Show your work.

1. Consider the following Greekos economy (a hypothetical economy): C = 100 + 0.75Yd

I = 60    G = 140       T = 0.2Y   (Note that Yd = Y – T) 

1.  Calculate the equilibrium value of Y. Show your work and provide graphical illustration.

1.  Does the government run a budget surplus, deficit, or a balanced budget in equilibrium? provide numerical answers. (Note that Government Budget = T – G)

1.  Demonstrate that in equilibrium, the sum of injections = sum of leakages. Provide numerical answers.

1. Assume YF (full employment level of Y) = $ 600. How much change in G should the Greekos government make to move the economy to full employment (i.e., to YF)?  Provide numerical and graphical answers (use the graph in part A).

1.  What is the effect of the above Greekos government policy on the government budget?  Provide numerical answers.