Question: Please help answer the below: 1. Let us consider an economy characterized by the following equations: G=90+91(YeY) T=t0+t1Y C=c+c1YD I=b0+b1Y YDEYT where go, 91, t0,

Please help answer the below:

Please help answer the below: 1. Let us consider an economy characterized

1. Let us consider an economy characterized by the following equations: G=90+91(YeY) T=t0+t1Y C=c+c1YD I=b0+b1Y YDEYT where go, 91, t0, t1, c0, (:1, b0, b1 are constant Positive coefcients, G, Y, YDJ', (2,1,1' are positive endogenous variables and Yeis a positive exogenous variable that stands for the expected production/output level. In this economy, production/output Y always adjusts to meet demand Z. a. Using the above equations, write down the equations of the aggregate demand for goods: Z, private saving and government saving as functions of lhe relevant coefcients and the exogenous variable. How does the expected output/income level Ye affect Z, private saving and government saving? Explain. (10 Points) b. Write down the equilibrium condition in the goods' market. Derive the equilibrium output/income level 1' as a function of the relevant coefcients and Ye. (4 Points) c. Which condition(s) guarantee the existence of a unique, positive and attainable equilibrium output/income level? (3 points) d. Derive the equilibrium output/income level Y when Y9 = Y. (3 points)

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