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11. Consider the following model of a closed economy: Y = AK1/21 1/2 Yd =C+1+G C = 200 + 0.8(Y - T) 1 = 2000

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11. Consider the following model of a closed economy: Y = AK1/21 1/2 Yd =C+1+G C = 200 + 0.8(Y - T) 1 = 2000 - 20,000r KS = 400 LS = 225 A = 10 G = 500 T = 1000d. Recalculate the equilibrium values of W/P, R/P, Y, S,, S, I, and r if the capital supply (KS) increases from 400 to 625 (all else equal). e. Using the original quantity of capital supplied (400), recalculate the equilibrium values of W/P. R/P, Y, SH, S, I, and r if taxes (T) decrease from 1000 to 500 (all else equal)

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