Q1. Assume the following model of expenditure sector:
Sp = C + I + G + NX
C = 420 + (4/5)YD
YD = Y - TA + TR
TA = (1/6)Y
TR0 = 100
I0 = 160
G0 = 180
NX0 = -40
If the government would like to increase the equilibrium level of output (Y) to the full-employment level Y* = 2,700, by Explain how much should government purchases (G) be changed?
Q2. Evaluate the impact globalization on domestic governance. Identity and explicate at least three significant factors requiring domestic changes.