QUESTION 1. Timbuktree is a country which has moved in recent times intomanufacturing of heavy machinery and is the largest producer andexporter of steel in the world. Its national income for 2013 is driven by thefollowing: Autonomous consumption $40, investment $80, governmentexpenditure $70, autonomous taxes $20, exports $100 and import $20. (Allinformation is expressed in billions of dollars). The marginal propensity toconsume is 0.6. The income tax rate is 0.20. The import rate is 0.1.

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