Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0596a40a-4760-4a89-b571-0f8234bc14c4%2F042ba143-9cd8-45e4-93a6-17af71140cff%2F43c328si_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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