Suppose that the government of Ansonia is experiencing a large budget surplus with fixed government expenditures of G = 250 and fixed taxes of T = 200. Both G and T are independent of income. Assume that consumers of Ansonia behave as described in the following consumption function. C=300+0.90(Y-T) Suppose further that investment spending is fixed at 1 = 200. Calculate the equilibrium level of GDP in Ansonia. Solve for equilibrium levels of Y, C, and S. Y= 5700. (Round your response to two decimal places.) C=5250. (Round your response to two decimal places.) S=250. (Round your response to two decimal places.) Now, assume that the Republican Congress in Ansonia succeeds in reducing taxes by 20 to a new fixed level of 180. Determine the value of the tax multiplier. Tax multiplier = (Round your response to two decimal places and include a minus sign if necessary.)
Suppose that the government of Ansonia is experiencing a large budget surplus with fixed government expenditures of G = 250 and fixed taxes of T = 200. Both G and T are independent of income. Assume that consumers of Ansonia behave as described in the following consumption function. C=300+0.90(Y-T) Suppose further that investment spending is fixed at 1 = 200. Calculate the equilibrium level of GDP in Ansonia. Solve for equilibrium levels of Y, C, and S. Y= 5700. (Round your response to two decimal places.) C=5250. (Round your response to two decimal places.) S=250. (Round your response to two decimal places.) Now, assume that the Republican Congress in Ansonia succeeds in reducing taxes by 20 to a new fixed level of 180. Determine the value of the tax multiplier. Tax multiplier = (Round your response to two decimal places and include a minus sign if necessary.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![Suppose that the government of Ansonia is experiencing a large budget surplus with fixed government expenditures
of G = 250 and fixed taxes of T = 200. Both G and T are independent of income. Assume that consumers of Ansonia
behave as described in the following consumption function.
C=300+0.90(Y-T)
Suppose further that investment spending is fixed at 1 = 200.
Calculate the equilibrium level of GDP in Ansonia. Solve for equilibrium levels of Y, C, and S.
Y= 5700. (Round your response to two decimal places.)
C=5250. (Round your response to two decimal places.)
S=250. (Round your response to two decimal places.)
Now, assume that the Republican Congress in Ansonia succeeds in reducing taxes by 20 to a new fixed level of 180.
Determine the value of the tax multiplier.
Tax multiplier = (Round your response to two decimal places and include a minus sign if necessary.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F35c89871-6016-4b02-8f33-7eb6634ae725%2F7e28a768-30bd-424d-bcad-bb8af739b7d3%2Fxr1080p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose that the government of Ansonia is experiencing a large budget surplus with fixed government expenditures
of G = 250 and fixed taxes of T = 200. Both G and T are independent of income. Assume that consumers of Ansonia
behave as described in the following consumption function.
C=300+0.90(Y-T)
Suppose further that investment spending is fixed at 1 = 200.
Calculate the equilibrium level of GDP in Ansonia. Solve for equilibrium levels of Y, C, and S.
Y= 5700. (Round your response to two decimal places.)
C=5250. (Round your response to two decimal places.)
S=250. (Round your response to two decimal places.)
Now, assume that the Republican Congress in Ansonia succeeds in reducing taxes by 20 to a new fixed level of 180.
Determine the value of the tax multiplier.
Tax multiplier = (Round your response to two decimal places and include a minus sign if necessary.)
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