5. Automatic adjustments to the government budget The following table provides some information on government spending (G) and tax revenues (T) at different levels of real GDP in a hypothetical economy. Note: Throughout this problem you can assume, for simplicity, that government transfers are zero. Real GDP (Billions of dollars) 460 500 540 Government Spending (G) (Billions of dollars) 72 72 72 Tax Revenues (T) (Billions of dollars) 70 72 74 Use the blue line (circle symbols) to plot the government spending schedule presented in the table. Then use the orange line (square symbols) to plot the economy's tax revenues schedule.
5. Automatic adjustments to the government budget The following table provides some information on government spending (G) and tax revenues (T) at different levels of real GDP in a hypothetical economy. Note: Throughout this problem you can assume, for simplicity, that government transfers are zero. Real GDP (Billions of dollars) 460 500 540 Government Spending (G) (Billions of dollars) 72 72 72 Tax Revenues (T) (Billions of dollars) 70 72 74 Use the blue line (circle symbols) to plot the government spending schedule presented in the table. Then use the orange line (square symbols) to plot the economy's tax revenues schedule.
Chapter11: Fiscal Policy
Section: Chapter Questions
Problem 19E
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