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please answer questions below Consider the following closed economy model: Y=C+G+IO C=H(YT0) 0 Consider the following closed economy model: C = II(Y - To) Notice
please answer questions below
Consider the following closed economy model: C = II(Y - To) Notice that the way it's setup the model has two exogenous variables, investment (10) and taxes (To ), and three endogenous variables: income (Y), consumption (C), and government expenditure (G). A. Determine whether the implicit function theorem is applicable here, and explain. [10 Points] B. What is the partial effect of To on Y* ? Can you sign it? [5 Points] What is the partial effect of To on G* ? Can you sign it? [5 Points] D. What is the partial effect of 10 on C* ? Can you sign it? [5 Points]
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