Help.. 21. Given: C = 400+.8(Yd), initial equilibrium = $7500, the target full-employment equilibrium = $9000....

e) To reach the target Y, the change in G should be

∆Y/∆G = 5

∆G = ∆Y/5

∆G = Yf-Y/5

Where Yf - $9000 and Y - $7500

∆G = 9000-7500/5

= 1500/5

= 300

Thus government need to increase $300 to achieve the target GDP

f) To reach the target Yf, there is need to decrease the tax by the amount

∆T = ∆Y/-4

= Yf -Y/-4

= 9000-7500/-4

= -1500/4

= -375

Thus to reach the target amount of Yf=$9000 from the initial Y = $7500 , there is a need to decrease the tax amount by $375.