Tax multiplier

Use the following macroeconomic model to answer the questions from 17 through 27:

C = 100 + 0.80Yd; C = consumption function; Yd (Y-T) = disposable income

I = 120; I = Investment

G = 150; G = Government expenditure

T = 50; T = Tax revenue

X = 30; X = Export

M = 20; M = Import

Also assume that Yf = Full employment GDP (Potential GDP) = 2,100

The tax multiplier for the economy is__________

Group of answer choices

3

-4

4

-5