Consider the following open economy (Home economy). The real exchange rate is fixed and equal to one. Saving, investment, government spending, taxes, imports and exports are given by: S = -80+ 0.18Y (1) I = Ī G = G T To +t₁Y Q = 91Y X = X1Y* where To is the level of autonomous taxes, q₁ and x₁ are, respectively the marginal propensity to import, and export reaction to the foreign country's income. An asterisk is used to designate variables related to the foreign economy. 1. Find the expression of saving (S) in terms of t₁, C₁, Co, and To, assuming that the consump- tion function has the following expression: C = co + C₁ (Y-T) 2. Assuming that t₁ = 0.1, and To = 100, find the values for the values of co and c₁. 3. Solve for equilibrium income in Home economy, in terms of I, G, To, t₁, 9₁, x₁, and Y*. 4. Assuming that q₁ = 0.1 and x₁ = 0.1, find the value of the multiplier for autonomous taxes (To) in Home economy?

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