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QUESTION
Suppose the government raises its revenue by a net tax of 25% on income, t = 0.25, the marginal propensity to consume out of disposable income is 0.
Suppose the government raises its revenue by a net tax of 25% on income, t = 0.25, the marginal propensity to consume out of disposable income is 0.8, and the government has an outstanding public debt of 1,500. The autonomous expenditure is (C0 + I0) is 600 and government expenditure is 400.What is the debt to GDP ratio?
