Consider an economy described by the following set of equations: C = 120 + 0.80DI I =

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Consider an economy described by the following set of equations:

C = 120 + 0.80DI

I = 320

G = 480

(X - IM) = -80

T = 200 + 0.25Y

Find the equilibrium level of GDP. Next, find the multipliers for government purchases and for fixed taxes. If full employment comes at Y = 1,800, what are some policies that would move GDP to that level?

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Macroeconomics Principles And Policy

ISBN: 9780324586213

11th Edition

Authors: William J. Baumol, Alan S. Blinder

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Question Posted: Sep 01, 2012 02:47 AM

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Consider an economy described by the following set of equations: C = 120 + 0.80DI I =

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Y C I G X IM C 120 08DI DI Y T DI Y 200 025Y DI 075Y 200 C 120 08075Y 200 C 120 06Y 160 C 06Y 40 Y 0...View the full answer

Macroeconomics Principles And Policy

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