In the table are actual data for macroeconomic aggregates
for the United States in billions of real (1992) dollars.
Year
Income/
Output
(Y/AD)
Consump-
tion
(C)
Invest-
ment
(I)
Govern-
ment
(G)
Net
Taxes
(T)
Govt.
Deficit
Disposable
Income
(Yd)
1994
6713
4473
980
1260
1176
84
5527
1995
6848
4578
1010
1260
1201
59
5647
Change
+135
+105
+30
+/- 0
+25
-25
+120
1. (4 points) Assume that taxes are not autonomous. That
is, taxes (T) depend on the level of national income (Yd). What
is the tax rate, approximately?
2. (4 points) If the only exogenous (autonomous) change from
1994 to 1995 was in investment, what is the value of the investment multiplier?
(Hint: (change Y) = mI (change I))
3. (4 points) Assuming that government multiplier and the
investment multiplier have the same value, how much of a change in government
spending would it take to raise national income to the full-employment
level if full-employment is at 6,900?