Question

In a closed economy, the consumption function is: c = 1.15 + 0.75(y - t) billions...

In a closed economy, the consumption function is:
c = 1.15 + 0.75(y - t) billions of 1992 dollars.
The tax function is:
t = 0.1y + 0.1 billions of 1992 dollars.
Planned investment is $1 billion and planned government expenditures
are $1.5 billion. Calculate:

The equilibrium level of real GDP.
2. Consumer expenditure
3. Saving
4. The investment multiplier
5. The government budget deficit
6. The leakages from and injections into the circular flow of income and
expenditure. Do leakages equal injections?

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