Suppose that the tax rate (t) is equal to zero, and that this economy's AEF is...

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Suppose that the tax rate (t) is equal to zero, and that this economy's AEF is given by the following: AE = 30,000 + 0.68Y And suppose that this economy's Desired Consumption (C) function is given by: C =15,000+ 0.8Y Does this economy engage in trade or not? How do you know? [1 point] What is this economy's equilibrium National Income (Y)? [2 points] What the equilibrium Desired Consumption (C) and Desired Savings (S) in this equilibrium? [2 points] Now suppose that the government imposes a tax rate of 20% (t = 20%). Write down the functions for Desired Consumption (C) and Desired Savings (S) as functions of National Income (Y). [Hint: Here it will be critical to make and use the distinction between National Income (Y) and the Disposable After-tax Income consumers have (YD)] [3 points] What is the new equilibrium National Income (Y), Desired Consumption (C), and Desired Savings (S) with this tax in place? [3 points] Suppose that the tax rate (t) is equal to zero, and that this economy's AEF is given by the following: AE = 30,000 + 0.68Y And suppose that this economy's Desired Consumption (C) function is given by: C =15,000+ 0.8Y Does this economy engage in trade or not? How do you know? [1 point] What is this economy's equilibrium National Income (Y)? [2 points] What the equilibrium Desired Consumption (C) and Desired Savings (S) in this equilibrium? [2 points] Now suppose that the government imposes a tax rate of 20% (t = 20%). Write down the functions for Desired Consumption (C) and Desired Savings (S) as functions of National Income (Y). [Hint: Here it will be critical to make and use the distinction between National Income (Y) and the Disposable After-tax Income consumers have (YD)] [3 points] What is the new equilibrium National Income (Y), Desired Consumption (C), and Desired Savings (S) with this tax in place? [3 points]

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This economy engages in trade because the equilibrium occurs where aggregate expenditures AE equal n... View the full answer