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April 23, 2014

Homework Help: economics

Posted by Jonathan on Saturday, February 6, 2010 at 5:54pm.

Suppose that the consumption function is C=100+.8(y-t). Initially investment and government expendtures are I=75 and G=150 and taxes are T=50.

1.Depict this economy using the keynesian cross.
calulate the initial equilibrium income.
how much will income increas if government expendtures increase to g=200.

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