Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fisca Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021 households in Ghana saved 20% of their disposable income (Y) and spent the rest on consumption In addition, GHe5,000.00 was spent on Consumption expenditure (C), which is independent o income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GHe8,000.00 was supposed to be financed by a lump sum tax of GHe 2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH€2,500.00. In addition, the country's import (M) during the previous fiscal year comprises of GHe 1,000.00 which was independent of the country's national income and 10% which was dependent of the country's national income. Given these data on Ghana for the previous year: i. Compute the equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S) (Hint: C = a + byd; T = To+tY and M = Mo + mY) Determine the Government fiscal stance
Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fisca Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021 households in Ghana saved 20% of their disposable income (Y) and spent the rest on consumption In addition, GHe5,000.00 was spent on Consumption expenditure (C), which is independent o income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GHe8,000.00 was supposed to be financed by a lump sum tax of GHe 2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH€2,500.00. In addition, the country's import (M) during the previous fiscal year comprises of GHe 1,000.00 which was independent of the country's national income and 10% which was dependent of the country's national income. Given these data on Ghana for the previous year: i. Compute the equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S) (Hint: C = a + byd; T = To+tY and M = Mo + mY) Determine the Government fiscal stance
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Taking The Nation's Economic Pulse
Section: Chapter Questions
Problem 1CQ
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