Wednesday, August 5, 2009

What fiscal policy should be implemented...?

if inflation is increasing



unemployment rate is low



real gdp is increasing



real wages are increasing



and productivity is increasing



What fiscal policy should be implemented...?payment calculator





Y=C+S=cY+S+G G=tY t=tax rates



PY=P(C+S+tY)=(Wages+Profits)P



t=(W+Pr)P-PC-PS / Y=P(W+Pr-C-S) / Y



P= tY/ (W+Pr-C-S)



This one is the equation that tells how much we have to increase t and how prices will move after it.



a) If costs are lower and lower when Y grows, tax rate has to be diminished. A=W+Pr-C-S



b) u=渭Y



P=t (u/渭) /(W+Pr-C-S)=tu/渭 A



u=P渭A/t



Here you鈥瞯e got the equation for unemployment and taxes



c) Y/P%26gt;0



Sorry but it鈥瞫 too boring.



What fiscal policy should be implemented...?

loan



I%26#039;d say contractionary fiscal policy (higher taxes, lower spending) to such some money out of economy, but you should check if you textbook says something similar - I am not that good with macro.

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