Question
Given the following information calculate Ye and answer the questions below. C = 50+ .8Yd, I = 50, G = 150, X = 150, MPM
Given the following information calculate Ye and answer the questions below.
C = 50+ .8Yd, I = 50, G = 150, X = 150, MPM = .2 and Tx rate = .2.
a.What is Ye?Draw an AE diagram to illustrate your answer.
b.What is Ce at Ye?
c.What is the budget balance at Ye?
d.If Y* is $20 more than Ye what is the cyclically adjusted deficit?
e.If government increases G by $20 to close the gap illustrate with the AD-AS diagram and the AE diagram and explain the impact on Ye.
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Crafting and Executing Strategy The Quest for Competitive Advantage
Authors: Arthur Thompson, Margaret Peteraf, John Gamble, A. J. Strickland III
19th edition
78029503, 978-0078029509
