Suppose you have an open economy with Government sector imposing tax to finance its expenditures. This economy is described as follows: (in billion dollars)  C = 250 + 0.85YD      where tax rate is 10 percent. autonomous investment expenditures are 140 billion dollars,  autonomous government expenditures are 80 billion dollars,  autonomous transfer payments are 100 billion dollars, NX = 0 a)     Calculate the equilibrium level of income in this model.    b)     Calculate the multiplier.    c)     Calculate the tax revenues (TA).

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Q: Suppose you have an open economy with Government sector imposing tax to finance its expenditures.…

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