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Consider an economy described by the following equations: Consumption function: C = 200 + 0.75*DI Disposable Income: DI = Y - T Taxes - Transfers:
Consider an economy described by the following equations: Consumption function: C = 200 + 0.75*DI Disposable Income: DI = Y - T Taxes - Transfers: T = 1200 Investment: I = 900 Government spending: G = 1300 Net Exports: NX = -100 Please answer the following THREE questions (Q18-Q20): In light of the numbers/equations above, which of the following is the economy's expenditure function: a. E = 1500 + 0.75*Y b. E = 1400 + 0.7*Y c. E = 1500 + 0.7*Y d. E = 1400 + 0.75*Y
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