C = 450+0.4y I = 350 G = 150 X = 70 Z = 35+0.1y T = 0.15y Yf = 1550 - Calculate the size of the multiplier - Calculate the equilibrium level of income - Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes , implying the tax rate would now be 0%.
C = 450+0.4y I = 350 G = 150 X = 70 Z = 35+0.1y T = 0.15y Yf = 1550 - Calculate the size of the multiplier - Calculate the equilibrium level of income - Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes , implying the tax rate would now be 0%.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 5SQP
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100%
C = 450+0.4y
I = 350
G = 150
X = 70
Z = 35+0.1y
T = 0.15y
Yf = 1550
- Calculate the size of the multiplier
- Calculate the equilibrium level of income
- Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes , implying the tax rate would now be 0%.
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