Derive the equation of the actual budget deficit

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Reference no: EM131391755

Consider the following economy with T_a = 800 and Y_A = 9750

a) If G = 3800, Derive the equation of the actual budget deficit BDA as a function of t (tax rate).

b) Find the tax rate at which the country will be running a budget balance.

c) Find the values of the deficits for the following tax rates: 20%, 22%, 25%, 30%, 31%, 32% 33% and 40%.

d) Graph your findings in c using any graphing tool.

Reference no: EM131391755

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