Assume:
C = 40 + 0.8(Y - T)
G = 10
I = 20
T = 0, where T are taxes.
(a) Calculate Y at equilibrium.
(b) Calculate C, I, and G at equilibrium.
(c) Now assume,
EX = 5 + 4EP /P
IM = 10 + 0.1 (Y - T) - 3EP /P
E = 3
P = 1.5
P = 2
Find equilibrium Y.
(a) Y = C + I + G
Y = 350
(b) C = 40 + 0.8 Y = 320
I = 20
G = 10
(c) Y = 269.1667
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