Answer to Question #36391 in Macroeconomics for Henry

Question

S=-5000+o.2Y(before adjustment in tax) I=10000 G=20000 T=5000
1) taking tax into consideration find the new savings function
2) based on the new savings function, determine the average propensity to save when Y=50000
3) interpret the average propensity to save value that you calculate in (2)
4)determine the equilibrium national income using leakage-injection method.

Answer 1

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