Business, 10.09.2019 23:30 Fatoucham1200

Given the following variables in the open economy aggregate expenditure model, autonomous consumption (c0) = 800, autonomous investment (i0) = 600, government spending (g0) = 1700, export spending (x0) = 700, autonomous import spending (m0) = 400, taxes (tp) = 200, marginal propensity to consume (c1) = 0.75, marginal propensity to invest (i1) = 0.2, and marginal propensity to import (m1) = 0.15. a. calculate the equilibrium level of income for the open economy aggregate expenditure model. (show all your steps carefully.) b. if there is a decrease in the marginal propensity to consume from 0.75 to 0.65, calculate the new equilibrium level of income and the value of the multiplier. (again, show all your steps carefully.)

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Given the following variables in the open economy aggregate expenditure model, autonomous consumptio...

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