Final answer:
The question addresses identifying withdrawals and injections in macroeconomic variables and finding the equilibrium value of investment. Withdrawals include savings, taxes, and imports, while injections include investment, government spending, and exports. At equilibrium, investment is confirmed to be $70 billion given the other values in the Keynesian model.
Step-by-step explanation:
The student's question involves macroeconomic variables and concludes with finding the value of investment at equilibrium. Withdrawals are parts of the economy that remove money, such as savings, taxes, and imports. Injections are activities that introduce money, such as investment, government spending, and exports. To find the equilibrium investment level, we need to set aggregate demand equal to aggregate supply.
Let's analyze the given data: the marginal propensity to save (MPS) is 0.1, and taxes are 0.2 of real GDP. Investments (I) are $70 billion, government spending (G) is $80 billion, and exports (X) are $50 billion. Imports (M), however, are 0.2 of after-tax income, which is considered an outflow. Thus, we acknowledge that taxes, savings, and imports are withdrawals, whereas investment, government spending, and exports are injections.
At equilibrium, aggregate demand (AD) equals aggregate supply (AS). Keynesian economics holds that AD = C + I + G + (X - M). Here, I is what we seek to confirm is already at equilibrium given the other values. Thus, if AD equals AS and includes the given level of I at $70 billion, we've established that investment is at its equilibrium given the current state of the economy.