Question
Suppose the following equations represent the UK economy (m=millions): Z = C + I + G C = 200m + 0.9YDYD= Y - T T
Suppose the following equations represent the UK economy (m=millions):
Z = C + I + G C = 200m + 0.9YDYD= Y - T
T = 100mI = 200mG = 1200mS=I
a.Given the above variables and their values, calculate the equilibrium level of national output.
b.Now, assume that taxes increase from 100m to 200m. What is the new equilibrium level of output?
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Principles of Microeconomics
Authors: N. Gregory Mankiw
8th edition
1305971493, 978-1305971493
