Answer to Question #147902 in Macroeconomics for Zacharia Mbokazi

Question

How to calculate the tax revenue to the government of this country when the economy
remains in equilibrium

Answer 1

Most simply, the formula for the equilibrium level of income is when aggregate supply (AS) is equal to aggregate demand (AD), where AS = AD. Adding a little complexity, the formula becomes Y = C + I + G, where Y is aggregate income, C is consumption, I is investment expenditure, and G is government expenditure.