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Consumption Expenditure: C = 100 + 0.5(Y-T) Investment Expenditure: 1 = 1,000 - 5,400/ Government Expenditure: G = 460 Lump-sum Constant Taxes: T = 460

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Consumption Expenditure: C = 100 + 0.5(Y-T) Investment Expenditure: 1 = 1,000 - 5,400/ Government Expenditure: G = 460 Lump-sum Constant Taxes: T = 460 Exports: 89 Imports: B. Money market, all Md values are in billions of C$: Interest Rate: /= 0.015 or 1.5% Money Demand: Md = 1,400 - 19, 100/ Note: Keep as much precision as possible during your calculations. Your final answers should be accurate to at least two decimal places. a) Given the above information, solve for the following: The equilibrium Y, money supply M, consumption expenditure C, and investment expenditure I. Y = 0 M = 0 C =0 1 = 0 The Conference Board of Canada has recently announced that consumer confidence in Canada dropped. Let the drop in consumer confidence to be equal to 10 points, from 100 to 90, so now C = 90 + 0.5(Y-T). b ) Find the value of the goods market multiplier. Goods market multiplier = 8 c) Find the new Y, by either using the long calculation method or by using the multiplier. New Y = 0

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