Question:In the real world, taxes typically depend on the level of
income and so tend to...
Question
In the real world, taxes typically depend on the level of
income and so tend to...
In the real world, taxes typically depend on the level of
income and so tend to be higher when income is higher. Considering
the following behavioral equations:T=t0+t1Y , C=c0+c1Yd , G= ̅G and
I=I ̅, what is the multiplier in this economy? Why fiscal policy is
in this case called an automatic stabilizer?