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Consider a mathematical model of the macro economy, called the Expenditure-Output Model. As a reminder, the basic form of such a model is: Y =

Consider a mathematical model of the macro economy, called the Expenditure-Output Model. As a reminder, the basic form of such a model is: Y = C + I + G + NE. Now, let's say we have the following parameters (note: this is a model that takes into account taxes).

a = 100

MPC = 0.8

I = 200

NE = 140

In addition, suppose that we are in a recession and we want to get out of it. We want to set government spending such that we reach Y = 3000. But we also want to keep a balanced budget, so we will set taxes accordingly. Calculate the G and T that will give us Y = 3000 with a balanced budget. Don't just write the final result, show your work!

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