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10Please give only typed answer Question 2 (4 marks) Consider a simple macro model with no government or foreign trade and demand-determined output. The equations

10Please give only typed answer

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Question 2 (4 marks) Consider a simple macro model with no government or foreign trade and demand-determined output. The equations of the model are C = 40 + 0.9YD and / = 150. a) Calculate the equilibrium level of national income. b) Now suppose desired investment expenditure suddenly decreases by 20. Without determining the equilibrium level of national income, calculate the resulting change in equilibrium national income. Hint: What is the value of the simple multiplier (SM)

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