Consider an economy in which consumption, taxes, and net exports all change as income changes. In addition,
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(a) Compute the value of the multiplier.
(b) Derive the equation for the autonomous planned spending schedule, Ap.
(c) Derive the equation for the IS curve, Y = kAp.
(d) Using the equation for the IS curve, calculate the equilibrium level of income at an interest rate equal to 3.
(e) At the equilibrium level of income at an interest rate of 3, show that leakages equal injection.
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