Concern a simple model of the national economy described by the difference equation Here Y k is

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Concern a simple model of the national economy described by the difference equation


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Here Yk is the total national income during year k, a is a constant less than 1, called the marginal propensity to consume, and b is a positive constant of adjustment that describes how changes in consumer spending affect the annual rate of private investment.



Find the general solution of equation (14) when a = .9 and b = 4/9. What happens to Yk as k increases?

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Linear Algebra And Its Applications

ISBN: 9781292351216

6th Global Edition

Authors: David Lay, Steven Lay, Judi McDonald

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