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Take the following model for an economy as a starting point: (1)Y= C + I + G (2) C = z C + c (

Take the following model for an economy as a starting point: (1)Y= C + I + G

(2) C = zC + c (Y - T )

(3) I = z I + b Y

(4) T = zT + tY

Assume that the following is given:

zc = 200, zI = 200, zT =150, b = 0.20, c = 0.75, t = 0.30, G = 400

The model above is now expanded to the following model:

(1)Y= C + I + G + X - Q

2) C = zC + c (Y - T )

3) I = z I + b Y

(4)T = zT + tY

(5)Q = aY

Assume that X = 400 og at a = 0,30(Otherwise keep the same values as given in the introduction to the assignment). What is the equilibrium value for Y?

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