how much increase in government expenditure be made to reach full employment

Posted on 2014-03-13 12:14:00 in Economics by EVA

Given the following values

                C = 40 + 0.8Yd

                I = 60

                G = 40

                T = 20

calculate:               (i)         the equilibrium level of national income.

(ii)        if full employment income is 700, how much increase in government expenditure be made to reach             full employment?

(iii)      how much should tax be reduced to reach full employment income level?

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