Table D7 represents the data behind a Keynesian cross diagram. Assume that the tax rate
Chapter 0, Problem Exercise D4(choose chapter or problem)
Table D7 represents the data behind a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income; the MPC out of the after-tax income is 0.8; investment is $2,000; government spending is $1,000; exports are $2,000 and imports are 0.05 of after-tax income. What is the equilibrium level of output for this economy? National Income After-tax Income Consumption I + G + X Minus Imports Aggregate Expenditures $8,000 $4,340 $9,000 $10,000 $11,000 Table D7 National Income After-tax Income Consumption I + G + X Minus Imports Aggregate Expenditures $12,000 $13,000 Table D7
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