Calculate equilibrium income with government activity
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C= 300 + .75(DI) [Consumption is determined by disposable income.)
E=C+I+G+NX [Aggregate demand is the total of consumption
investment
government purchases and net exports.]
E=Y* [In equilibrium total spending matches total income or total output.]
Calculate the equilibrium level of GDP for this economy (Y*).
C= 300 + .75(DI) [Consumption is determined by disposable income.)
E=C+I+G+NX [Aggregate demand is the total of consumption
investment
government purchases and net exports.]
E=Y* [In equilibrium total spending matches total income or total output.]
Calculate the equilibrium level of GDP for this economy (Y*).
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