SELECT * FROM question_mgmt as q WHERE id=5432 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=59 AND chapterId=606 and ex_no='1' AND status=1 ORDER BY CAST(question_no AS UNSIGNED) CBSE Free NCERT Solution of 12th macro-economics Government Budget and Economy consider an economy described by the following fun

Question:

Consider an economy described by the following functions: C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?

Answer:

(a) C = 20 + 0.80 Y

I = 30
c = 0.80
G = 50
T = 100

Equilibrium level of income

Y =
=
Expenditure multiplier

(b) Increase in government expenditure

∆G = 30

New equilibrium expenditure

Equilibrium level of income increase by 150 (1050 - 900)

(c) Tax multiplier

So,
=
=
= -120

New equilibrium level of income = Y+ ∆Y

= 900 + (-120)
= Rs 780


< Previous Question

Next Question >

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='59' AND ex_no!=0 AND status=1 and id!=5432 ORDER BY views desc, last_viewed_on desc limit 0,10

  • Popular questions of class 12 Macro Economics

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='59' AND ex_no!=0 AND status=1 and id!=5432 ORDER BY last_viewed_on desc limit 0,10

  • Recently Viewed Questions of Class 12 Macro Economics

Comments

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

Comment(s) on this Question


NCERT Solutions

Quick Links

Resources

Support