Construct the multiplier model using the consumption function C = 100 + 0.80Y and an investment spending I =20 (assume no G and NX): a) If government will increase its taxes T = 20, much will be the Y change due to the tax? b) If you compare Y in letter b with the Y in letter, by how much did equilibrium change after the increase in both G and T?

Construct the multiplier model using the consumption function C = 100 + 0.80Y and an investment spending I =20 (assume no G and NX): a) If government will increase its taxes T = 20, much will be the Y change due to the tax? b) If you compare Y in letter b with the Y in letter, by how much did equilibrium change after the increase in both G and T?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 11SQ

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