The table below shows the values of selected macroeconomics variables over a period: YEAR 1 (R-Billion) YEAR 2 (R-Billion) Investment 200 220 Saving 180 190 Export 100 110 Imports 120 140 Government Expenditure 150 160 Taxation 150 160 Equilibrium National Income 1 800 2 000 (a) Calculate the value of the multiplier for this economy. (b) Should the full employment level of income be R-B2 255, by how much should government change its spending to reach this level of income during the next year given the multiplier has not changed. (c) Evaluate whether or not this policy approach is effective in real life in achieving the desired level of GDP.

/in /by

The table below shows the values of selected macroeconomics variables over a period:
YEAR 1 (R-Billion) YEAR 2 (R-Billion)

Investment 200 220

Saving 180 190

Export 100 110

Imports 120 140

Government Expenditure 150 160

Taxation 150 160

Equilibrium National Income 1 800 2 000

(a) Calculate the value of the multiplier for this economy.

(b) Should the full employment level of income be R-B2 255, by how much should government change its spending to reach this level of income during the next year given the multiplier has not changed.

(c) Evaluate whether or not this policy approach is effective in real life in achieving the desired level of GDP.

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