2. Suppose the consumption function of country A is C-1000+ 0.8Y, ( is the disposable income). Investment expenditure is 1500. The government purchase expenditure is 1500. The government transfer payment is 800. Tax is 2050. Please try to calculate: (1) the equilibrium national income Y (2) the government purchase multiplier K, (3) the tax multiplier K,

2. Suppose the consumption function of country A is C-1000+ 0.8Y, ( is the disposable income). Investment expenditure is 1500. The government purchase expenditure is 1500. The government transfer payment is 800. Tax is 2050. Please try to calculate: (1) the equilibrium national income Y (2) the government purchase multiplier K, (3) the tax multiplier K,

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 5TY

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