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Unformatted text preview: t in high equilibrium GDP.
Use Table 10-3 p. 176 for data. Key Graph p. 177
Aggregate Expenditure-Domestic Output Approach
G G C
$20B in G will
create $80B in
29 Real GDP Taxation and Equilibrium
Taxes cause DI to fall short of GDP by the amount of the tax; reduces both consumption and
saving at each level of GDP. The size of the reduction is determined by the MPC and
√ Assume a lump-sum tax, constant amount at each lev...
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This note was uploaded on 01/30/2014 for the course ECON 259 taught by Professor Geanakopolis during the Fall '10 term at Purdue University-West Lafayette.
- Fall '10