Definition of Equilibrium Income Y = AE

Essay

Definition of equilibrium income Y = AE
(a) Calculate the equilibrium level of income for this economy.
(b) Based on your answer in Part (a), is the country experiencing a trade surplus or deficit? If so, what is the size of the deficit or surplus?
(c) Suppose government spending increases by 100. Calculate what happens to the size of the trade deficit or surplus. Briefly explain any changes in the size of any surplus or deficit.
(d) What is the government spending multiplier?
(e) What is the size of the deficit response index for this economy? Explain.