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Can someone please show me how to approach this question ? Thanks 0 Exercise 2 Suppose an economy is represented by the following equations: Z=C+I+G

Can someone please show me how to approach this question ? Thanks

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0 Exercise 2 Suppose an economy is represented by the following equations: Z=C+I+G C=200+0.6YD YD=YT 1:200 6:1,000 T=500 1 a) Calculate the equilibrium level of output. Draw on a graph (Y, Z) the demand curve. Using the 45 degree line derive the equilibrium level of output. b) Suppose that after an exogenous shock to demand (for example an increase in consumer condence) autonomous consumption (co) increases from 200 to 300. Determine the variation in output and the multiplier in this economy. c) Illustrate graphically the effect of the increase in co calculated in point (b) and explain why the increase in output is greater than the initial increase in consumption

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