3.Although our development of the keynesian cross in this chapter assumes that taxes are a fixed amount, most countries levy some taxes that rise automatically with national income. (Example in the United states include the income tax and the payroll tax) let's represent the tax system by writing tax revenue as
Where Tbar and t are parameters of the tax code. The parameter t is the marginal tax rate: if income rises by 1$,tax rise by t×1$
A. How does this tax system change the way consumption responds to change in GDP
B. In the keynesian cross,how does this tax system alter the government-purchase multiplier
C. In the IS-LM model, how does this tax system alter the slope of this IS curve