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Assume a two sector economy where consumption, C = $100 + 0.9Y and I = $50, where Y is income and I is investment. Calculate
Assume a two sector economy where consumption, C = $100 + 0.9Y and I = $50, where Y is income and I is investment. Calculate the equilibrium level of output for this hypothetical economy. What would the level of consumption be if the economy were operating at 1400? In which direction would you expect the economy to move to at $1400 and why?
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