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2 Problems. Show all your calculations. (60 points) 1.7+7+7+7+2 points) In a closed economy, the consumption (C), the pl
Posted: Mon Apr 18, 2022 9:11 am
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- 2 Problems Show All Your Calculations 60 Points 1 7 7 7 7 2 Points In A Closed Economy The Consumption C The Pl 1 (35.07 KiB) Viewed 30 times
2 Problems. Show all your calculations. (60 points) 1.7+7+7+7+2 points) In a closed economy, the consumption (C), the planned investment (1), and the government spending (G) are given by, respectively, C20 +0.8 Y. I = 50, and G= 50, where Y. =Y-T is the disposable income, and Y denotes the real GDP. (i) Suppose that the economist x proposes lump-sum taxes such that T = 100. Write the planned aggregate expenditure (AE) as a function of GDP (Y). (ii) Given the proposal of x, find the equilibrium GDP (Y). (iii) Suppose now that another economist : proposes a progressive tax system such that T = 50 +0.25Y. Write the planned aggregate expenditure (AE.) as a function of GDP (Y). (iv) Given the proposal of 2, find the equilibrium GDP (Y“). (v) Which proposal results in the larger equilibrium GDP?