C=300+0.50(Y-T)

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter30: Government Budgets And Fiscal Policy
Section: Chapter Questions
Problem 42CTQ: Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go...
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Consider the economy of Hicksonia.
a. C=300+0.50(Y-T)
The investment function is I=100-20t
Government purchases and taxes are both 150.For this economy, use a graph to illustrate
the IS curve for r ranging from 0 to 8. (4marks)

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