Assume you have the following model of the expenditure sector: AD  = C + I + G + NX         C = Co + cYD       YD = Y - TA + TR       TA  = TAo      TR  = TRo                             I = Io                                 G = Go                         NX = NXo If a change in income by ∆Y = - 800 leads to a change in savings by ∆S = - 160, what is the size of the expenditure multiplier?

Economics (MindTap Course List)
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Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy
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Assume you have the following model of the expenditure sector:

AD  = C + I + G + NX        

C = Co + cYD      

YD = Y - TA + TR      

TA  = TAo     

TR  = TRo                            

I = Io                                

G = Go                        

NX = NXo

If a change in income by ∆Y = - 800 leads to a change in savings by ∆S = - 160, what is the size of the expenditure multiplier?

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