In an economy, as per the aggregate income identity : Y=C+I+G+XM. Assuming the following relations exist and
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Question:
In an economy, as per the aggregate income identity : Y=C+I+G+X−M. Assuming the following relations exist and values given, show your working to compute the value of the multiplier:
- C=c0+c1(1−t)Y
- I=a0−a1r
- G=g0−g1Y
- X=x0
- M= m0+m1Y
c0=3.71, c1= 0.55, t= 0.78, a0= 4.83, a1= 0.57, g0= 9.31, g1= 0.05, x0= 2.46, m0= 6.19 and m1= 0.3
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Business
ISBN: 978-0324829556
10th Edition
Authors: Willian M Pride, Robert J. Hughes, Jack R Kapoor
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