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In a simple macroeconomic model, the value of national income Y may be found by solving the system: G = 250 (government expenditure) T=50(taxation)I =
- In a simple macroeconomic model, the value of national income Y may be found by solving the system:
G = 250 (government expenditure)
T=50(taxation)I = 100 (planned investment)
C = 0.75Yd + 150 (consumption)
where disposable income Yd = Y T.
(a) Calculate the equilibrium level of national income.
(b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.
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