Question
Suppose consumption is given by: C=100+0.5(Y-T), planned investment is 200, government spending is 100, and the
government is running a balanced budget. The equilibrium level of income is:
- 350
- 800
- 700
- 250
The tax multiplier is:
- -1
- 1
- 2
- -2
Suppose both government expenditures and taxes increase by the same amount, X. Output must increase by:
Economics