39. An economy described by the AS/AD model: C = 13+.8YD, I = 10, T = 10, t =.25, G = 35, NX=10-SP-.1Yand AS = 5P. The government will reduce G to levels that will balance the trade deficit so that nx₂ = 0. Provide diagrams for AE/45, AS/AD and NX to illustrate and quantify this policy change.
39. An economy described by the AS/AD model: C = 13+.8YD, I = 10, T = 10, t =.25, G = 35, NX=10-SP-.1Yand AS = 5P. The government will reduce G to levels that will balance the trade deficit so that nx₂ = 0. Provide diagrams for AE/45, AS/AD and NX to illustrate and quantify this policy change.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please solve the whole question and show all mathematical steps. Also provide 3 diagrams as needed in question.
![80
F3
Q
39. An economy described by the AS/AD model: C = 13+.8YD, I = 10, T = 10, t =.25, G = 35, NX = 10-5P-.1Yand AS = 5P. The
government will reduce G to levels that will balance the trade deficit so that nx2 = 0. Provide diagrams for AE/45, AS/AD
and NX to illustrate and quantify this policy change.
F4
9
F5
MacBook Air
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F6
F7
Page
DII
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Real GOP
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Transcribed Image Text:80
F3
Q
39. An economy described by the AS/AD model: C = 13+.8YD, I = 10, T = 10, t =.25, G = 35, NX = 10-5P-.1Yand AS = 5P. The
government will reduce G to levels that will balance the trade deficit so that nx2 = 0. Provide diagrams for AE/45, AS/AD
and NX to illustrate and quantify this policy change.
F4
9
F5
MacBook Air
C
F6
F7
Page
DII
19 >
Real GOP
8
DD
of 19
D
O
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