Suppose That Real National Income (Y)is Equal to 800 and That

question 112

Multiple Choice

Suppose that real national income (Y) is equal to 800 and that government purchases are equal to 200.If the government's net tax revenues are equal to tY,where t is the net tax rate,then what is the value of t necessary for the government to have a balanced budget?

• A)20%
• B)25%
• C)30%
• D)35%
• E)40%