Expected Income Taxes Consumption Expected Saving Investment Government Spending 190 10 162 18 8 20 250 207 27 20 20 310 22 36 32 20 370 28 297 44 20 430 34 342 54 56 20
(a) The equilibrium level of income will be $
(b) The marginal propensity to invest is
(c) The marginal propensity to save is . (Be careful—the marginal propensity to save is defined on the basis of disposable income, not total income.)
(d) For equilibrium income to increase by 60, government spending must increase by
(e) Therefore the government-spending multiplier is .