EXERCISE 1

Go +¿+ X − M −C .T o 85+10+160+100−30−0,75.100
a) Y =C o + I o + ¿= = 500
o o m

1−C m . ( 1−T m )−I m + M m 1−0,75. ( 1−0,2 )−0,1+ 0,2

b) T= 100 + 0,2 X 500 = 200 ; M= 30 + 0,2 X 500 = 130 ; G=G o=160

1
c) k= 1−C . 1−T −I + M = 2
m ( m) m m

d) ∆ T =20 ; ∆ X=10 ; ∆ G=5

G 2=G+ ∆G=160+5=165

T 2=T + ∆ T =100+ (−20 )=80

X 2 = X + ∆ X=¿ 100 + 10 = 110

Go +¿+ X − M −C .T o 85+10+165+110−30−0,75.80
Y =C o + I o + ¿=
o o m
=560
1−C m . ( 1−T m )−I m + M m 1−0,75. ( 1−0,2 )−0,1+0,2

EXERCISE 2

G o +¿+ X − M −C .T o 100+ 300+250+300−50−0,8.(0)

a) Y= C o + I o +
o o m
= =2250 ¿
1−C m . ( 1−T m )−I m + M m 1−0,8. ( 1−0,1 ) +0,12
Y p−Y 1 2500−2250
b) U t =U n + .50 %=0,05+ .50 %=0,1
Yp 2500
c) M =50+ 0,12Y =50+0,12 .2250=320
X = 300
Because M > X (320 > 300 ) => Trade Surplus
T = 0,1Y = 0,1 X 2250 = 225
G= 250
Because G > T (250 > 225 ) => Budget Deficit
d) T = G => 0,1.Y = 250 => Y= 2500
e) ∆ X=20
X 2 =X + ∆ X=320
 Because X increase 20, so :
G o +¿+ X − M −C .T o 100+ 300+250+320−50−0,8.(0)
Y= C o + I o +
o o m
= =2300 ¿
1−C m . ( 1−T m )−I m + M m 1−0,8. ( 1−0,1 ) +0,12

M = 50 + 0,12Y = 50 + 0,12. 2300 = 326

Because X < M ( 320 < 326 ) => Trade Surplus
f)
1 1
f1) k = 1−C . 1−T −I + M = 1−0,8. ( 1−0,1 )−0+ 0,12 =2,5
m ( m) m m

∆ Y Y p−Y o 2500−2250
∆ G=∆ AD= = = =100
k k 2,5
−∆ AD −100
f2) ∆ T = C = 0,8 =−125
m

f3) ∆ G=∆ AD=−C m . ∆ T =−¿0,8 . (-125)= 100