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March 26, 2017

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Suppose;

C = 500 + 0.80(Y – 400)

I = 400

G = 400

(X – M) = -100

Solve for income or GDP

  • Economics - ,

    GDP = C + I + G + (X - M)

    Where:
    C = household consumption expenditures / personal consumption expenditures
    I = gross private domestic investment
    G = government consumption and gross investment expenditures
    X = gross exports of goods and services
    M = gross imports of goods and services

    Note: (X - M) is often written as XN, which stands for "net exports"

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