Determine marginal propensity to saving

Posted on 2013-10-17 19:34:00 in Economics by MESS_O

From the following information about an economy, determine:

1. 
   The equilibrium level of GDP.


2. 
   Marginal propensity to saving.


3. 
   Balance of trade at equilibrium level of GDP.


4. 
   The value of equilibrium GDP if government expenditure increases by Rs 200 crore.

Consumption function (c) = 100 + 0.7Y_d

Autonomous investment (I) = Rs 100 crore

Government expenditure (G) = Rs 300 crore

Taxes (T) = Rs 150 crore

Exports (X) = Rs 300 crore

Import function (M) = 75 0.15Y

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