How large is the multiplier for a change in taxes

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Reference no: EM13213475

Consider the following setup for problems #16-#20: C = 1000 + 0.7(Y - T), I = 400, NX = 300 - 0.2Y, G = 1000

1.) What are the marginal propensities to consume and to import, respectively?

2.) Suppose taxes are 1000, then what is the level of equilibrium real GDP?

3.) If taxes are 1000, then what is the level of consumption at equilibrium real GDP?

4.) How large is the multiplier for a change in taxes?

Reference no: EM13213475

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