Answer to Question #4116 in Macroeconomics for kenny
A tax system can be represented by writing tax revenue as R= T + tY,
where T and t are parameters of the tax code.The parameter t is the marginal tax rate,(eg if you increase income by $1,tax rise by t X $1)
1)how does the tax system change the way consumption responds to changes in GDP?
2)In the Keynesian cross,how does this tax system alter the government-purchases multiplier?
3)in the IS-LM model,how does this tax system alter the slope of the IS curve?