1. With reference to the above diagram, calculate the equilibrium level of income after the introduction of government spending and proportional income tax. Show all calculation steps. 2. With reference to the above diagram, if national income (Y) is R500 million, calculate the induced consumption after the introduction of government spending and proportional income tax. Show all calculation steps

1. With reference to the above diagram, calculate the equilibrium level of income after the introduction of government spending and proportional income tax. Show all calculation steps. 2. With reference to the above diagram, if national income (Y) is R500 million, calculate the induced consumption after the introduction of government spending and proportional income tax. Show all calculation steps

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 2
Consider an economy that is described by the following: C = 500 + 0.75Yd I = 100 G = 100 T = 100 a. Derive the equilibrium level of income b. Derive the effects of a PhP 10 increase in government spending on equilibrium income c. Derive the effects of a PhP 10 increase in income taxes on equilibrium income.
economics