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Can you solve this question with full explanation please Qu estio n 2 {i} Consider an economy where the various components of expenditure follow.I these
Can you solve this question with full explanation please
Qu estio n 2 {i} Consider an economy where the various components of expenditure follow.I these equations: C = 100 + 0.8Y I: 200 G = 100 X: 400 M: 0.2? Calculate the equilibrium level of GDP in this economy in the m {ii} Suppose that a boost in output in the rest of the world causes an increase in the country's export to X ' = 800. Calculate the effect of the increase in exports on the equilibrium level of GDP as well as on the trade balance o'Fthe country. {iii} How would the results in {ii} change if the economy had a marginal propensity to import equal to 0.6? Discuss your findings. {iv} Discuss the following statement: 'A monetary expansion leads to a deterioration ofa countrfs trade balanceStep by Step Solution
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