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
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Chapter1: Making Economics Decisions
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Y₁
Total production, income, millions of rands per year
Y₂ Y₂
Aggregate spending, millions of rands per year
350
Show Transcribed Text
180
A₁-C+1-150 +0.5Y
A₂=C+I+G = 180 +0.5(1-0.3)Y
A₂=C+I+G = 180 +0.5Y
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
Transcribed Image Text:Y₁ Total production, income, millions of rands per year Y₂ Y₂ Aggregate spending, millions of rands per year 350 Show Transcribed Text 180 A₁-C+1-150 +0.5Y A₂=C+I+G = 180 +0.5(1-0.3)Y A₂=C+I+G = 180 +0.5Y 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
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