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When given elements of an economy such as C (private consumption), Y (aggregate output), T (exogenous taxes) Ip (planned investment), G (government expenditure), and NX
When given elements of an economy such as C (private consumption), Y (aggregate output), T (exogenous taxes) Ip (planned investment), G (government expenditure), and NX (net exports), in what circumstances would you need to use G* or T* values where the * means the corresponding foreign counterparts to the domestic variables without an * ? How would you include these values when calculating things such as the multiplier and short run equilibrium output?
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