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Consider an economy described as follows: Y=C+I+G C=200+0.75(YT) [=5010r Assume that G and T are constants. r is the real interest rate. 1. (10 points)

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Consider an economy described as follows: Y=C+I+G C=200+0.75(YT) [=5010r Assume that G and T are constants. r is the real interest rate. 1. (10 points) Identify endogenous and exogenous variables in the model. 2. [15 points) If government spending decreases by 50. calculate the change in private saving. public saving, and national saving. [Your answers should be numbers). 3. (15 points) If taxes decrease by 200, calculate the change in private saving, public saving, and national saving. (Your answers should be numbers)

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