Q4. Consider the national - income modelwhere goods can be produced locally orimported. Local consumers, investors andgovernment in addition to foreign countriesare the main customers to these goods.Further, government and external demandsfor goods and services are considered fixed.Investment and imports depend positively onincome linearly and private consumption isalso depending on private income.1. Write the system .2. Find the exogenous and endogenousvariables in the above model.3. Solve the model

A two-sector model and the government sector make up a three-sector model of income determination.…

Answered: 1. Write the system . 2. Find the…

Business

Economics

1. Write the system . 2. Find the exogenous and endogenous variables in the above model. 3. Solve the model

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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Exercise D25 What role does government play in stabilizing the economy and what are the tradeoffs that must be considered?
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