a. The following information is a three sector economy of a Consumption function (C) = 310 + 0.6Yd Investment multiplier (I) = 200 Government expenditure (G) = 170 Tax (T) = 180 iv. At the equilibrium level, compute the value of average propensity to consume (APC) v. If tax increase to RM200, derive consumption function after tax

a. The following information is a three sector economy of a Consumption function (C) = 310 + 0.6Yd Investment multiplier (I) = 200 Government expenditure (G) = 170 Tax (T) = 180 iv. At the equilibrium level, compute the value of average propensity to consume (APC) v. If tax increase to RM200, derive consumption function after tax

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 2TY

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QUESTION 2

a. The following information is a three sector economy of a

Consumption function (C)	=	310 + 0.6Yd
Investment multiplier (I)	=	200
Government expenditure (G)	=	170
Tax (T)	=	180

iv. At the equilibrium level, compute the value of average propensity to

consume (APC)

v. If tax increase to RM200, derive consumption function after tax

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