Use the following information on economy X to answer the questions below. Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500 Exports of goods and services: X = 200 Imports of goods and services: Z = 150 Proportional tax rate: t =25% Full employment level of income = 3575 Calculate the change in government spending required to reach full employment level of income.
Use the following information on economy X to answer the questions below. Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500 Exports of goods and services: X = 200 Imports of goods and services: Z = 150 Proportional tax rate: t =25% Full employment level of income = 3575 Calculate the change in government spending required to reach full employment level of income.
Chapter9: Aggregate Expenditures
Section: Chapter Questions
Problem 6E
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Use the following information on economy X to answer the questions below.
Consumption function: C = 250 + 0.8Y
Investment spending: I = 150
Government spending: G = 500
Exports of goods and services: X = 200
Imports of goods and services: Z = 150
Proportional tax rate: t =25%
Full employment level of income = 3575
Calculate the change in government spending required to reach full employment level of income.
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