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Assume the following open economy C 300 +0.80(Y-125) I=150 G=250 X=115 M = 125+.05Y a. Determine (solve for) the equilibrium level of income or
Assume the following open economy C 300 +0.80(Y-125) I=150 G=250 X=115 M = 125+.05Y a. Determine (solve for) the equilibrium level of income or GDP (Y). b. Determine the impact on income of a 50 increase in government spending from 250 to 300. c. Using the original data, compute the impact of a 50 decrease in taxes from 125 to 75. d. If the government seeks to raise income to 3,000, how much should it raise government spending?
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Answer a To find the equilibrium level of income or GDP Y we need to set total output equal to total ...
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Economics
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
18th edition
978-0077413798, 0-07-336880-6, 77413792, 978-0-07-33688, 978-0073375694
