Suppose the government Daikai balances its budget over a five-year period.Autonomous taxes are $50 and the marginal tax rate is 25%.The following table shows the level of GDP and government expenditure in each of the first 5 years:
a)Fill in column (4)and (5).Suppose the level of GDP for Year 5 is $380 million.
b)What level of government spending in Year 5 will balance the budget over the five-year cycle?
c)What level of autonomous taxes in Year 5 will balance the budget over the five-year cycle?
a)

Question

Suppose the government Daikai balances its budget over a five-year period.Autonomous taxes are $50 and the marginal tax rate is 25%.The following table shows the level of GDP and government expenditure in each of the first 5 years:
  a)Fill in column (4)and (5).Suppose the level of GDP for Year 5 is $380 million.
b)What level of government spending in Year 5 will balance the budget over the five-year cycle?
c)What level of autonomous taxes in Year 5 will balance the budget over the five-year cycle?
a)

Quizplus · Accepted Answer

The Answer of Suppose the government Daikai balances its budget over a five-year period.Autonomous taxes are $50 and the marginal tax rate is 25%.The following table shows the level of GDP and government expenditure in each of the first 5 years:
  a)Fill in column (4)and (5).Suppose the level of GDP for Year 5 is $380 million.
b)What level of government spending in Year 5 will balance the budget over the five-year cycle?
c)What level of autonomous taxes in Year 5 will balance the budget over the five-year cycle?
a)

Suppose the Government Daikai Balances Its Budget Over a Five-Year