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Assume the following model of the closed economy of Wakanda. Y = Output/GDP Y = C + I + G Y = F(K, L) =
Assume the following model of the closed economy of Wakanda.
Y = Output/GDP
Y = C + I + G
Y = F(K, L) = 20K0.3L0.7 and K = 4 and L = 20.
C = 50 + 0.75(Y - T)
Y - T = Disposable income
T = 80 I = 100 - 20r
r = real interest rate
G = 85
Calculate the following;
a) Y = ?
b) Disposable income c) C = ?
d) public saving
e) national saving
f) r = ?
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