Advertisements
Advertisements
प्रश्न
Suppose that for a particular economy, investment is equal to 200, government purchases are 150, net taxes (that is lump-sum taxes minus transfers) is 100 and consumption is given by C = 100 + 0.75Y (a) What is the level of equilibrium income? (b) Calculate the value of the government expenditure multiplier and the tax multiplier. (c) If government expenditure increases by 200, find the change in equilibrium income.
Advertisements
उत्तर
I = 200
G = 150
T = 100
C = 100 + 0.75 Y
So, C (Autonomous consumption) = 100
And, MPC (c) = 0.75
(a) Equilibrium level of income
`Y=1/(1-c)(barC-cT+I+G)`
`=1/(1-0.75)(100-0.75xx100+200+150)`
`=1/0.25xx375`
`=375/0.25xx100="Rs."1500`
(b) Government expenditure multiplier
`(DeltaY)/(DeltaG)=1/(1-c)=1/(1-0.75)=1/0.25`
`=1/25xx100=4`
Tax multiplier `=(DeltaY)/(DeltaT)=(-c)/(1-c)`
`=(-0.75)/(1-0.75)=(-0.75)/0.25=-3`
(c) ΔG = 200
New equilibrium income
`=1/(1-c)[bar C-cT+I+G+DeltaG]`
`=1/(1-0.75)[100-0.75xx100+200+150+200]`
`=1/0.25xx575`
`=(100xx575)/25="Rs." 2300`
Therefore, change in equilibrium income = 2300 − 1500 = Rs 800
APPEARS IN
संबंधित प्रश्न
Explain 'Revenue Deficit in a Government budget? What does it indicate?
Define fiscal deficit.
‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.
We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y (a) Find the equilibrium income. (b) What are tax revenues at equilibrium Income? Does the government have a balanced budget?
Are fiscal deficits inflationary?
Which of the following statement is true?
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is the formula for revenue deficit?
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is MOST LIKELY to be the main contributor to the fiscal deficit in this case?
A fiscal deficit is equal to borrowings. It is ______
The difference between fiscal deficit and interest payment is known as ______
How do we get the primary deficit from the fiscal deficit?
If India exports goods worth ₹20 crores and imports goods worth ₹30 crores, it will have a ______
Fiscal deficit equals:
The shape of average revenue curve in monopoly is ______
The Fiscal Deficit measures:
The Revenue Deficit is always a part (sub-component) of which deficit?
The Primary Deficit shows the borrowing requirement of the government:
For 2024–25 Budget Estimates, the fiscal deficit was estimated at what percentage of GDP?
