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A. If this economy was an open economy without a government sector , what would be the level of GDP and aggregate expenditure ? ( 2 marks ) B. If the economy becomes an open economy with a government sector , what would be the level of GDP and aggregate expenditure ? ( 2 marks ) c . Calculate the size of the multiplier associated with changes in government spending . ( 1 mark ) D. What is the effect of adding the government sector to the economy on the GDP and the AE ? ( 2 marks )
Show transcribed image textANSWER) (A) If this economy was an open economy without a government sector the GDP would be $300 Billion and aggregate expenditure would be $120 billion because aggregate expenditure intersects the 45-degree line at $300 billion when aggregate expen…View the full answerTranscribed image text: 80 O 100 200 400 GDP ($8) A. If this economy was an open economy without a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) B. If the economy becomes an open economy with a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) c. Calculate the size of the multiplier associated with changes in government spending. (1 mark) D. What is the effect of adding the government sector to the economy on the GDP and the AE? (2 marks) 45 300 80 O 100 200 400 GDP ($8) A. If this economy was an open economy without a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) B. If the economy becomes an open economy with a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) c. Calculate the size of the multiplier associated with changes in government spending. (1 mark) D. What is the effect of adding the government sector to the economy on the GDP and the AE? (2 marks) 45 300 80 0 100 200 300 400 GDP ($B) A. If this economy was an open economy without a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) B. If the economy becomes an open economy with a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) c. Calculate the size of the multiplier associated with changes in government spending. (1 mark) D. What is the effect of adding the government sector to the economy on the GDP and the AE? (2 marks) 45 80 0 100 200 300 400 GDP ($B) A. If this economy was an open economy without a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) B. If the economy becomes an open economy with a government sector, what would be the level of GDP and aggregate expenditure? (2 marks) c. Calculate the size of the multiplier associated with changes in government spending. (1 mark) D. What is the effect of adding the government sector to the economy on the GDP and the AE? (2 marks) 45
