Suppose marginal propensity to consume is 0.75 and there is a 20% proportional income tax. Find the change in equilibrium income for the following:
(i) Government purchases increase by 20
(ii) Transfers decrease by 20
In March rohan's monthly expenditure was90% of his monthly income. His monthly income increased by 30% and his monthly expenditure increased by 20% when compared to the previous month. Find the percentage increase in his monthly savings.
Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.