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Consider the following behavioural equations that describe the goods market in a closed economy: C = co + clYD YD = Y T I =a0+a1Ya2i

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Consider the following behavioural equations that describe the goods market in a closed economy: C = co + clYD YD = Y T I =a0+a1Ya2i where C is consumption, YD is disposable income, Y is income, I is investment and i is the interest rate. Also, assume that government spending, G, and taxes, T, are both exogenous. The remaining parameters are all positive and exogenous; in particular, Co defines the autonomous part of consumption, 0

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