III. Given: C= 50,000 + .8YDISP T=.25Y TR = 10,000 G= 20,000 I= 10,000 (Consumption Function) (Tax Equation) (Transfer Payments) (Government Expenditures) (Investment) %3D %3| Find equilibrium leveis of Y, YpısP, C and S. 2) 1) Assume YTARGET = 250,000. Find the level of transfer payments that would be necessary to stimulate GDP to its target level. 3) Assume YtaRGETt = 250,000. Find the level of government expenditures that would be necessary to stimulate GDP to its target level. 4) Set up the first three rounds of the multiplier process for the shock in part (3).

III. Given: C= 50,000 + .8YDISP T=.25Y TR = 10,000 G= 20,000 I= 10,000 (Consumption Function) (Tax Equation) (Transfer Payments) (Government Expenditures) (Investment) %3D %3| Find equilibrium leveis of Y, YpısP, C and S. 2) 1) Assume YTARGET = 250,000. Find the level of transfer payments that would be necessary to stimulate GDP to its target level. 3) Assume YtaRGETt = 250,000. Find the level of government expenditures that would be necessary to stimulate GDP to its target level. 4) Set up the first three rounds of the multiplier process for the shock in part (3).

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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