Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Tax is a source of revenue to the government. The imposition of tax by the government is a leakage to the circular flow of
Tax is a source of revenue to the government. The imposition of tax by the government is a leakage to the circular flow of national income. When the households and firms had to pay for the taxes, less amount of money will be passed on to the flow of income. There are two types of tax that the government can impose which are autonomous tax and induced tax. C = 20 + 0.9Yd, I= $10 million T= $20 million , G= $20 million YE = SX Given above the information of 4-sector economy. a) Compute the national income equilibrium using an autonomous tax. b) Illustrate by using diagram based on AD/AS approach. c) Justify your opinion on the consumption.
Step by Step Solution
★★★★★
3.43 Rating (143 Votes )
There are 3 Steps involved in it
Step: 1
The equilibrium level of national income is considered as the significant component and incorporates ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started