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Consider an economy described by the following equations: Aggregate consumption: C= 400+ 0.2(Y-T); Aggregate investment: I = 120-10i; Government sector: G=T=100. Derive the aggregate
Consider an economy described by the following equations: Aggregate consumption: C= 400+ 0.2(Y-T); Aggregate investment: I = 120-10i; Government sector: G=T=100. Derive the aggregate demand function; Calculate the equilibrium level of income. What is the effect of an increase in the interest rate on the equilibrium level of income?
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
