Question
Given the following model: Y = C + I C = a +bY d T =T 0 + tY Y d = Y -T where
Given the following model:
Y = C + I
C = a +bYd
T =T0+ tY
Yd= Y -T
where I = 30, a = 85, b = 0.75, t = 0.2, and T0= 20
a)Solve for the equilibrium national income Y
b)What is the value of the investment multiplier?
c)What is the value of the multiplier if t = 0?
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International Economics
Authors: Dominick Salvatore
12th edition
9781118955727, 1118955765, 1118955722, 978-1118955765
