Question
GIVEN:Ca = 5,000 mps = 0.1I = 6,000 G = 4,000 Ta = 1,000 mpt =0.2TR = 1,500 REQUIRED:Show the solutions. 1.Formulate the consumption function.(5
GIVEN:Ca = 5,000 mps = 0.1I = 6,000 G = 4,000
Ta = 1,000 mpt =0.2TR = 1,500
REQUIRED:Show the solutions.
1.Formulate the consumption function.(5 pts)
2.Formulate the savings function. (5 pts)
3.Derive the equilibrium income for an economy consisting of HHs only and prove that Y = C & S = 0 using any approach of your choice. (15 pts)
4.Derive the equilibrium income for an economy consisting of HHs & BFs and prove that Y = C + I&S = I using any approach of your choice. (15 pts)
5.Derive the equilibrium income for an economy consisting of HH, BF & G does not impose taxes and prove that Y = C + I + G&S = I + G using any approach of your choice.(15 pts)
6.Derive the equilibrium income for an economy consisting of HH, BF & G imposes fixed taxes and prove that Y = C + I + G&S + T = I + G using any approach of your choice. (15 pts)
7.Derive the equilibrium income for an economy consisting of HH, BF & G imposes fixed & behavioral taxes and prove that Y = C + I + G&S + T = I + G using any approach of your choice. (15 pts)
8.Derive the equilibrium income for an economy consisting of HH, BF & G imposes fixed & behavioral taxes but grants transfer payments and prove that Y = C + I + G&S + T = I + G + TR using any approach of your choice. (15 pts)
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