Assume the consumption function is C = 200+ (0.8) YD and the income tax rate is t = 0.25. What will be the effect of an increase in government transfers by \ Delta TR 100 on the full employment budget surplus? how do I arrive at correct answer of decrease of 100

Assume the consumption function is C = 200+ (0.8) YD and the income tax rate is t = 0.25. What will be the effect of an increase in government transfers by \ Delta TR 100 on the full employment budget surplus? how do I arrive at correct answer of decrease of 100

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 7SQ

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Hi great expert Hand written solution is not allowed.

Assume the consumption function is C = 200+ (0.8)
YD and the income tax rate is t = 0.25. What will be
the effect of an increase in government transfers by\
Delta TR 100 on the full - employment budget
surplus? how do I arrive at correct answer of decrease
of 100

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