Table D7 represents the data behind a Keynesian cross diagram. Assume that the tax rate is 0.4
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Table D7 represents the data behind a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income; the MPC out of the after-tax income is 0.8; investment is $2,000; government spending is $1,000; exports are $2,000 and imports are 0.05 of after-tax income. What is the equilibrium level of output for this economy?
Table D7
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National Income $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 After-tax Income Consumption $4,340 I+G+ X Minus Imports Aggregate Expenditures
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