Economy production function

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Given that the US economy production function (to calculate current GDP and potential GDP) is : GDP = Y= F(K,L,N) = 0.04K+0.03L+0.03N. The current GDP is produced with K=200, L=100, and N=100, the full employment GDP (potential GDP) can be potentially produced with K=225, L=150 , and N= 150. Given that the average MPS (not MPC) is 0.25 (for problems 1, 2, and 3), and active population is 100 millions. GDP is in Trillion dollars.How much of a tax rebate per person per year is required to reach the full employment level of GDP if tax rebate is planned for a total of 5 years? You should assume that the tax rebate is only for consumers and stimulates consumption spending only (i.e., no changes in investment and government spending is desired).

Reference no: EM131007388

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