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