B/ Consider the Open Economy with Government Participation (i.e. the Mixed Economy): Planned Expenditures: AE=C+I+G+XIM Consumption: C=370+0.8(YT) Net Tax Revenue: T=128+0.22Y Gross Investment: I=634 Government Expenditures: G=786 Exports: X=789 Imports: IM=90+0.07Y Potential Output: Yp=5,522 Note: Calculate the marginal propensity to spend (z) to at least four (4) decimal places. All other calculations may be rounded to two (2) decimal places. Part 7: We can write the Aggregate Expenditures equation as: AE=+ (Y). (4 marks) Part 8: Calculate the Expenditures Multiplier for the Mixed Economy. (2 marks) Part 9: Calculate the Autonomous Tax Multiplier for the Mixed Economy. (2 marks) Part 10: Calculate the Balanced-Budget Multiplier for the Mixed Economy. (2 marks) Part 11: Calculate the equilibrium ouput (Y) for the Mixed Economy. (4 marks) Part 12: Calculate the change in Government Expenditures ( G) required to close the output gap (YpYe). (3 marks) Part 13: Calculate the change in autonomous Taxes ( To) required to close the output gap (YpYe). (3 marks) Part 14: The expenditures multiplier for the Open Economy with Government Participation (Mixed Economy) is the expenditures multiplier for the Closed Economy with no Government Participation beci (5 marks) Part 15: Calculate Total Injections at the equilibrium rate of output: (2 marks) Part 16: Calculate Total Leakage at the equilibrium rate of output: (4 marks).

1. B/ Consider the Open Economy with Government Participation (i.e. the Mixed Economy):
Planned Expenditures: AE=C+I+G+XIM Consumption: C=370+0.8(YT) Net Tax Revenue:
T=128+0.22Y Gross Investment: I=634 Government Expenditures: G=786 Exports: X=789
Imports: IM=90+0.07Y Potential Output: Yp=5,522 Note: Calculate the marginal propensity to
spend (z) to at least four (4) decimal places. All other calculations may be rounded to two (2)
decimal places. Part 7: We can write the Aggregate Expenditures equation as: AE=+ (Y). (4
marks) Part 8: Calculate the Expenditures Multiplier for the Mixed Economy. (2 marks) Part 9:
Calculate the Autonomous Tax Multiplier for the Mixed Economy. (2 marks) Part 10: Calculate
the Balanced-Budget Multiplier for the Mixed Economy. (2 marks) Part 11: Calculate the
equilibrium ouput (Y) for the Mixed Economy. (4 marks) Part 12: Calculate the change in
Government Expenditures ( G) required to close the output gap (YpYe). (3 marks)
Part 13: Calculate the change in autonomous Taxes ( To) required to close the output gap
(YpYe). (3 marks) Part 14: The expenditures multiplier for the Open Economy with Government
Participation (Mixed Economy) is the expenditures multiplier for the Closed Economy with no
Government Participation beci (5 marks) Part 15: Calculate Total Injections at the equilibrium
rate of output: (2 marks) Part 16: Calculate Total Leakage at the equilibrium rate of output: (4
marks)