Y=C+I+G=(20+380+400)+0.6Y-> equilibrium Y=2000.
t-G = 0.2 * 2000-400 = 0-& gt; surplus
As for the fifth question, it is very problematic.
When G=4 10, the equilibrium Y = 2025, so the multiplier of government expenditure is 2025/2000=2.5, and I calculated11-MPC (11-0.6) =
I guess the last question of this question is what will happen to11-MPC when the tax rate is a percentage of y, and this question is asked like this.
If t is part of y (floating tax rate), then the expenditure multiplier becomes
11-c (1-t), where t is the tax rate.