In a closed economy, macroeconomic data of a countries in year X as follows ($ billion)
A. Consumption function : C = 100 + 0.80Yd
b. Tax function : T = -150 + 0.25Y
c. Investment Function : I = 60
d. Government spending : G = 80
Question:
A. Determine the equilibrium GDP, equilibrium national consumption and national saving
balanced.
b. Draw the position of the balance on a graph
c. What is the government budget deficit?
d. If the government increases its spending by $5, what is the GDP?
new. Is the government's budget deficit or surplus?
e. If the planned investment is $55, what is the new GDP? What is the deficit
government budget