Asked by Shanna

1) If C = 1000 + 7/8[GDP-1000], I = 700 and G = 1000 and the economy is currently in equilibrium at 400 below full employment GDP, the correct fiscal policy would be to increase G by?

2) If C = 500 + 3/4[GDP- 100], I = 300, G = 400, Xn =- 10 and full employment GDP is 210 less than current GDP, the proper action would be to increase taxes by?

Answers

Answered by Alice
705
3987.5
Answered by Shanna
Thanks Alice for trying, but that's not correct, the first answer is 50 I figured it out, but I'm still having a hard time with the 2nd question.
There are no AI answers yet. The ability to request AI answers is coming soon!

Related Questions