Question

You are given data on the following variables in an economy:

Item Value
Government spending 300
Planned investment 200
Net exports 50
Autonomous taxes 250
Income tax rate 0.1
Marginal propensity to consume 0.5
a) Consumption (C) is 600 when income (Y) is equal to 1500.
Solve for autonomous consumption.

b) Solve for the equilibrium level of output if there is an income tax t=0.2.

c) In the economy with an income tax of 10%, what is the budget balance of the government?

Answer 1

Answer:

Sorry I Don't Know Sorry Bhai.