Question
Assume that there is an economy where, the consumption function is given by C = 100 + 0.8YD, while investment I = 50, and the
Assume that there is an economy where, the consumption function is given by C = 100 + 0.8YD, while investment I = 50, and the fiscal policy is summarized by: C = 200 (Government spending). TR = 50 (Transfer payments). t = 0.2 (Income tax ratio). a. What is the equilibrium level of income in this country? b. What is the value of the multiplier, a, in the presence of income taxes?
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Econophysics And Financial Economics An Emerging Dialogue
Authors: Franck Jovanovic, Christophe Schinckus
1st Edition
0190205032, 9780190205034
