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For a income determination model Y = C+ I + G, C = Co + bY d, I = Io+ aYd. Yd = Y - T, T = To + tY, G = Go, 0 < a, b, t < 1, find the equilibrium level of income. Find the multipliers for each input.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

For a income determination model Y = C +I + G, C = Co + bY d, I = Io + aYd,
Yd = Y – T, T = To +tY, G = Go, 0 < a, b, t < 1, find the equilibrium level of income. Find the
multipliers for each input.

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