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For an economy in which government expenditure is $100 billion, exports are $60 billion, imports are 15% of real GDP, autonomous consumption is $250 billion,
For an economy in which government expenditure is $100 billion, exports are $60 billion, imports are 15% of real GDP, autonomous consumption is $250 billion, investment $350 billion and marginal propensity to consume is 0.75,
Derive the equation for the AE curve
What are the values of the slope and the vertical a maxis intercept of the AE curve?
What is the multiplier?
If investment rises to $450 billion what will be the new equilibrium GDP?
What is the impact of balance of trade in the question immediately above?
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