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What is the value of the autonomous tax ta

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Reference no: EM132316858

Consider the following economy

Ca = 1800 ; small c is c = 0.8 ; T = 1200 + 0.20 Y; IP = 1800 ; G = 2000; NX = 600 - 0.08 Y.

a) What is the value of the autonomous Tax Ta ( Hint: see the formula and compare)

b) Compute the value of the multiplier

c) Derive the equation of the autonomous spending

d) Find the equation of the IS curve

e) Compute the new IS curve when government spending increases by 100. What is the difference between the two IS curves?

Reference no: EM132316858

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