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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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