Business, 06.07.2021 19:00 brittsterrr
Question 5
Consider the consumption function:
C = 120 + 0.8Yd
where Ya is disposable income.
a) Write down expressions for C, in terms of national income, Y, when there is:
i.
ii.
ili.
No tax
A lump sum tax of £100
A proportional tax in which the proportion is 0.25.
(10 marks)
b) Sketch all three functions on the same diagram, over the range OsY5800, and
briefly describe any differences or similarities between them.
(10 marks)
c) Sketch the 45 degree line, C = Y on the same diagram, and hence estimate
equilibrium levels of national income in each case.
(10 marks)
[END OF ONLINE TIMED ASSESSMENT]
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Question 5
Consider the consumption function:
C = 120 + 0.8Yd
where Ya is disposable in...
C = 120 + 0.8Yd
where Ya is disposable in...
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