The level of equilibrium income, Y, = $_____(Enter response rounded two decimal places)   The government collects net taxes of $_____   Remember the budget surplus is equal to taxes minus government spending,   The governments budget surplus is $____

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
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Consider the following information for a country:

 

Consumption function: C = 85+0.8Yd

 

Investment function: l = 85

 

Government spending: G=60

 

Net taxes: T = -40+0.25Y

 

Disposable Income: Yd = Y - T

 

Equilibrium: Y = C + l + G

 

The level of equilibrium income, Y, = $_____(Enter response rounded two decimal places)

 

The government collects net taxes of $_____

 

Remember the budget surplus is equal to taxes minus government spending,

 

The governments budget surplus is $____

 

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