In a closed economy the behavioral equations of households

Question

Closing the GDP gap

In a closed economy, the behavioral equations of households, firms and government are given below:

C = 200 + 0.75Y_d

I = 160

G = 80

t = 20%

(c) What is the value of the autonomous expenditure multiplier?

(d) If the government estimates the full-employment income at 1200, is there an inflationary or a recessionary gap?

(e) By how much should G be increased or decreased to remove the gap?