Given C=500 + 0.80Y, I = 100, G=100, and the government decides to finance G by also increasing taxes T=100, how much is the new equilibrium level of output with the tax? The government decides to also impose an income tax tY=0.25Y. How much is the new equilibrium level of output with the income tax? and how much is the value of the expenditure multiplier?
Given C=500 + 0.80Y, I = 100, G=100, and the government decides to finance G by also increasing taxes T=100, how much is the new equilibrium level of output with the tax? The government decides to also impose an income tax tY=0.25Y. How much is the new equilibrium level of output with the income tax? and how much is the value of the expenditure multiplier?
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter18: Debates In Macroeconomics Over The Role And Effects Of Government
Section: Chapter Questions
Problem 1WNG
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Given C=500 + 0.80Y, I = 100, G=100, and the government decides to finance G by also increasing taxes T=100, how much is the new equilibrium level of output with the tax? The government decides to also impose an income tax tY=0.25Y. How much is the new equilibrium level of output with the income tax? and how much is the value of the expenditure multiplier?
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