Question

A country exports the same amount as it imports, hence net exports =0. The following equations...

  1. A country exports the same amount as it imports, hence net exports =0. The following equations describe its national accounts:

National Accounts Expenditure Identity:        Y = C + G + I

Household Consumption:                                C = 180 +0.6(Y -T)

Government Expenditure:                              G=600

Private Sector Investment:                             I=1000-200R, R=2

Tax Revenue:                                                  T=0.1Y

  1.      Find Y, T, C
  2. Compute C/Y, G/Y and I/Y (percentage)
  3.       Find the government deficit: D= G - T
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