There is a simple national income model where T denotes tax revenue, t denotes income tax rate.Y= C+lo+GoC= a +b(Y-T) , (a>0, 0o, 0

There are 2 kinds of variables in these equations. The variables Y,C, T are the variables that are…

Answered: Y= C+lo+Go C= a +b(Y-T) , (a>0, 0o, 0

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Y= C+lo+Go C= a +b(Y-T) , (a>0, 0o, 0

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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There is a simple national income model where T denotes tax revenue, t denotes income tax rate.
Y= C+lo+Go
C= a +b(Y-T) , (a>0, 0<b<1)
T= d+ tY , (d>o, 0<t<1)
Identify the types of variables and equations.
Use Cramer's Rule to solve for the equilibrium national income, consumption and taxation.

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