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A closed-economy has full-employment output of 1000. Government purchases are 210. Desired consumption and desired investment are given by C =45 -50r + 0.7Y and
A closed-economy has full-employment output of 1000. Government purchases are 210. Desired consumption and desired investment are given by C =45 -50r + 0.7Y and | = 75 100r, where Y is output and r is the real interest rate. Assume that output equals full-employment output. The equilibrium level of desired national saving is equal to
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