You are given the following data C=130+0.5 (1-t) Y (Consumption) T = tY (Tax revenue) (Investment) I=120 t= 0.5 (tax rate) G=200 (Government Spending) a. What does (1-t)Y show us? c. What is the budget balance (T-G) when the economy is at the equilibrium Y*? d. What will be the change in the equilibrium value of output if government spending decreases by 30?

You are given the following data C=130+0.5 (1-t) Y (Consumption) T = tY (Tax revenue) (Investment) I=120 t= 0.5 (tax rate) G=200 (Government Spending) a. What does (1-t)Y show us? c. What is the budget balance (T-G) when the economy is at the equilibrium Y*? d. What will be the change in the equilibrium value of output if government spending decreases by 30?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please solve step by step and quick

You are given the following data
C=130+0.5 (1-t) Y
(Consumption)
T = tY
(Tax revenue)
(Investment)
I=120
t= 1.5
(tax rate)
G=200
(Government Spending)
a. What does (1-t)Y show us?
c. What is the budget balance (T-G) when the economy is at the equilibrium Y*?
d. What will be the change in the equilibrium value of output if government spending decreases by 30?

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