9. (LO 2, 3, 4) The government of Osiris believes in balancing its budget over a seven-year cycle. Over the first six years, it has maintained its spending at $150 billion and its MTR at 0.25. (There are no autonomous taxes in Osiris.)

Column 2 of Table 7.9 shows the level of GDP in each of the first six years in the cycle.

a) Complete Table 7.9.

Suppose that the estimated level of GDP in year 7 is projected to be $600.

b) What level of government spending (assuming no change in the tax rate) is necessary for the government of Osiris to end the seven-year cycle with its budgetary goal on target?

c) Alternatively, what change in the tax rate (assuming no change in government spending) is necessary for the government of Osiris to end the seven-year cycle with its budgetary goal on target?