Question
Let the national income model be: Y = C + l 0 + G C = a - b(Y - T 0 ) (a >
Let the national income model be:
Y = C + l0+ G
C = a - b(Y - T0) (a > 0, 0 < b < 1)
G=g^y (0 Provide a general equilibrium solution for each endogenous variable as a formula of the parameters given. Prepare a numerical example by selecting and justifying a set of parameters that are close to real estimates for the US economy.
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Managerial Economics and Organizational Architecture
Authors: James Brickley, Jerold Zimmerman, Clifford W. Smith Jr
5th edition
73375829, 978-0073375823
