Consider an open economy described by the following equations: C = 400 + 0.90 (Y – T)                       X = 100 - 0.10 Y            I = $300                                               G = $200                                 T = $150                                 What is the equilibrium level of national income?  If both government spending and taxes increase by $10 each, what happens to the national income?  Does the balanced budget multiplier theorem hold?

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