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1.Answer the following questions using the aggregate expenditures model of the economy described below. C = 50 + .8Y d T = 60 + .25Y

1.Answer the following questions using the aggregate expenditures model of the economy described below.

C = 50 + .8Yd

T = 60 + .25Y

Ia = 80

Ga = 58

Xa = 60

M = .1Y

A What are the marginal propensity to consume, the marginal tax rate, and the marginal propensity to import?

B What is the saving function? What is the marginal propensity to save?

C What is the aggregate expenditure function?

D What is the equilibrium level of real GDP?

E What is the size of the multiplier?

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