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Suppose C=C_a+cY^(d ) (where Y^d=Y-T), I=I_a-ir, G=G_a+gY, T=T_a+tY, K=K_a+tY, and L=L_a-ir. Calculate the government expenditure multiplier, the lump-sum tax multiplier, and the balanced budget multiplier.

Suppose

C=C_a+cY^(d ) (where Y^d=Y-T),

I=I_a-ir,

G=G_a+gY,

T=T_a+tY,

K=K_a+tY, and

L=L_a-ir.

Calculate the government expenditure multiplier, the lump-sum tax multiplier, and the balanced budget multiplier. Explain how the efficacy of the fiscal policy is affected by the slope of the speculative demand for money.

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Question 1 Suppose C = Cq + cyd (where Yd = Y - T), I = la - ir, G = Ga + gY, T = Ta+ ty, K = Ka + tY, and L = La - ir. Calculate the government expenditure multiplier, the lump-sum tax multiplier, and the balanced budget multiplier. Explain how the efficacy of the fiscal policy is affected by the slope of the speculative demand for money

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