Answer Happy

please answer part f
The diagram to the right shows desired aggregate expenditure for the economy of Sunset Island. The AE curve assumes a net tax rate (t) of 10 percent, a marginal propensity to consume of 0.75, autonomous exports of $100 billion, and a marginal propensity to import (m) of 20 percent. a. What is the level of desired investment expenditure (1)? The level of desired investment expenditure is $ 200 billion. (Round your response to the nearest whole number.) b. What is the level of government purchases (G)? The level of government purchases is $ 100 billion. (Round your response to the nearest whole number.) c. What is the autonomous portion of consumption? The autonomous portion of consumption is $ 100 billion. (Round your response to the nearest whole number.) d. What is total autonomous expenditure? Total autonomous expenditure is $ 500 billion. (Round your response to the nearest whole number.) The marginal propensity to spend is 0.48. (Round your response to two decimal places.) e. Starting from equilibrium national income of $962 billion, suppose government purchases decreased by $25 billion. Describe the effect on the AE curve and on equilibrium national income. The AE curve shifts down and equilibrium national income changes by $ 48 billion. (Round your response to the nearest whole number. Use the rounded value of the marginal propensity to spend obtained above. For example, if the marginal propensity to spend is found to be 0.375 but rounded to 0.38, you should use the value of 0.38, not 0.375.) f. Starting from equilibrium national income of $962 billion, and continuing to assume a marginal propensity to import (m) of 20 percent and a marginal propensity to consume of 0.75, suppose the net tax rate increased from 10 percent to 20 percent of national income. Describe the effect on the AE curve and on equilibrium national income. The marginal propensity to spend is now (Round your response to two decimal places.) With this change, equilibrium national income will ▼ decrease or increase Desired Aggregate Expenditures ($ billions) Aggregate Expenditure and Equilibrium 1,500 1,400- 1,300- 1,200- 1,100- 1,000- 900- 800- 700- 600- 500- 400- 300- 200- 100- 0- 0 200 45° line AE + G 400 600 800 1,000 1,200 1,400 National Income ($ billions)