Assume That Tax Revenue Is Represented by the Following Function

question 1

Essay

Assume that tax revenue is represented by the following function: T = - 200 + .25Y, where the first term represents net taxes and Y represents GDP. Assume furthermore that government spending is $400 billion and the economy is in equilibrium at $2000 billion. Calculate the value of the budget deficit.

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Definitions:

Presidential Veto

The power of the President to refuse to sign a bill passed by Congress, thereby preventing it from becoming law unless overridden by a two-thirds vote in both houses.

Congress

The national legislative body of a country, particularly in the United States, it's made up of two houses: the Senate and the House of Representatives.

Two-Thirds Vote

A voting requirement used in various legislative bodies, where two-thirds of the voting members must agree on a proposal for it to pass.

Seventeenth Amendment

An amendment to the U.S. Constitution ratified in 1913 that established the direct election of U.S. Senators by popular vote, replacing their selection by state legislatures.