Consider an economy described by the following set of equations: C = 120 + 0.80DI I =
Question:
Consider an economy described by the following set of equations:
C = 120 + 0.80DI
I = 320
G = 480
(X - IM) = -80
T = 200 + 0.25Y
Find the equilibrium level of GDP. Next, find the multipliers for government purchases and for fixed taxes. If full employment comes at Y = 1,800, what are some policies that would move GDP to that level?
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Y C I G X IM C 120 08DI DI Y T DI Y 200 025Y DI 075Y 200 C 120 08075Y 200 C 120 06Y 160 C 06Y 40 Y 0...View the full answer
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Related Book For
Macroeconomics Principles And Policy
ISBN: 9780324586213
11th Edition
Authors: William J. Baumol, Alan S. Blinder
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