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3. Consider a closed economy described by the following Y=C+I+GC=160.pdf

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3. Consider a closed economy described by the following: Y=C+I+GC=160+0.8YdT=200+0.25Y Assume further that I=200 and G=200. a. Solve for Y and government saving (i.e., the budget surplus). b. Suppose that lump sum taxes are reduced from 200 to 100 . Solve for Y and government saving. What is the value of the fixed tax multiplier?.

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3. Consider a closed economy described by the following: Y=C+I+GC=160+0.8YdT=200+0.25Y Assume further that I=200 and G=200. a. Solve for Y and government saving (i.e., the budget surplus). b. Suppose that lump sum taxes are reduced from 200 to 100 . Solve for Y and government saving. What is the value of the fixed tax multiplier?

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  • 1. 3. Consider a closed economy described by the following: Y=C+I+GC=160+0.8YdT=200+0.25Y Assume further that I=200 and G=200. a. Solve for Y and government saving (i.e., the budget surplus). b. Suppose that lump sum taxes are reduced from 200 to 100 . Solve for Y and government saving. What is the value of the fixed tax multiplier?