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Consider the following information for Mexico.

Autonomous Consumption | 450 |
---|---|

MPC | 0.6 |

Tax Rate | 0.25 |

Investment | 1000 |

Government Expenditure | 100 |

Exports | 40 |

MPI | 0.05 |

What is the equilibrium level of GDP in the income-expenditure model?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

Suppose that there is a decrease in Exports by $50.

What is the new equilibrium level of GDP in the income-expenditure model?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

What is the difference between the original and new GDP as a result of a decrease in Exports?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity