Model: AE = C+I+G +(X-M) C = 200+ 0.8Yd 1 = 245-25i G = 310 X...

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Model: AE = C+I+G +(X-M) C = 200+ 0.8Yd 1 = 245-25i G = 310 X = 145 M = 0.1Y T = 0.25Y Yp = 2000 M₁ = 500 Ma = 900 - 100i (For ease of calculation, treat percentage interest as a whole number ex: 10% interest as i=10) Assume, unless otherwise state, that the economy falls into the Keynesian range of the SRAS Part A: Initial Equilibrium a) Exogenous and Engogenous variables. b) Determine i c) AED d) z e) Multiplier f) Induced consumption g) Y h) NX i) BB j) What is the Size and the Type of the output Gap, if any. k) Without MP, FP, how would the economy return to equilibrium? 1) According to Keynes, why would that be difficult? Model: AE = C+I+G +(X-M) C = 200+ 0.8Yd 1 = 245-25i G = 310 X = 145 M = 0.1Y T = 0.25Y Yp = 2000 M₁ = 500 Ma = 900 - 100i (For ease of calculation, treat percentage interest as a whole number ex: 10% interest as i=10) Assume, unless otherwise state, that the economy falls into the Keynesian range of the SRAS Part A: Initial Equilibrium a) Exogenous and Engogenous variables. b) Determine i c) AED d) z e) Multiplier f) Induced consumption g) Y h) NX i) BB j) What is the Size and the Type of the output Gap, if any. k) Without MP, FP, how would the economy return to equilibrium? 1) According to Keynes, why would that be difficult?

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a Exogenous variables C I G X M T YD ML Md Endogenous variables i AE Y NX BB b We ... View the full answer