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The Budget Function for the Economy of Sunsville Is T

Question 189

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The budget function for the economy of Sunsville is T - G = -400 + 0.25Y.
a)Suppose income is $4,000.What is the value of the budget surplus or deficit?
b)What range of income will give Sunsville a budget surplus?
c)What range of income will give Sunsville a budget deficit?
d)At what level of income will there be a balanced budget?

Correct Answer:

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a)Budget surplus,$60...

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