Answered: Assume: Y= C + I + G + NX C =…

Assume: Y= C + I + G + NX C = 400 + (0.8)YD Io = 200 G = 300 + (0.1)(Y* - Y) YD = Y - TA + TR NXo = - 40 TA = (0.25)Y TRo = 50 How do I calculate the multiplier? Thank you.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter5: An Introduction To Macroeconomics

Section: Chapter Questions

Problem 1DQ

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Question

Assume:

Y= C + I + G + NX

C = 400 + (0.8)YD

I_o = 200

G = 300 + (0.1)(Y^* - Y)

YD = Y - TA + TR

NX_o = - 40

TA = (0.25)Y

TR_o = 50

How do I calculate the multiplier?

Thank you.

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