Model of a closed economy with government. Given is C = 50 + 0.8 (Y-T) I = 70 G = 300 t = 0.2 a. Calculate Y0 and the multiplier. b. Calculate the budget surplus. c. Calculate Y0 and budget surplus for G=200. d. What are the consequences of a higher tax rate of 0.25? Calculate Y0, the multiplier and the budget surplus.

Model of a closed economy with government. Given is C = 50 + 0.8 (Y-T) I = 70 G = 300 t = 0.2 a. Calculate Y0 and the multiplier. b. Calculate the budget surplus. c. Calculate Y0 and budget surplus for G=200. d. What are the consequences of a higher tax rate of 0.25? Calculate Y0, the multiplier and the budget surplus.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter13: Federal Deficits, Surpluses, And The National Debt

Section: Chapter Questions

Problem 20SQ

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