Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180 Nx=-40 YD=Y+TR-TA TA=(1/6)Y Assume we want to reach Y*=2,700 by changing government transfer payments (TR) instead. By how much should TR be changed?
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Assume the following model of the expenditure sector:
S=C+I+G+Nx
TR=100
C=420+(4/5)YD
I=160
G=180
Nx=-40
YD=Y+TR-TA
TA=(1/6)Y
Assume we want to reach Y*=2,700 by changing government transfer payments (TR) instead. By how much should TR be changed?
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