In an economy, as per the aggregate income identity : Y=C+I+G+X−M. Assuming the following relations exist and values given, show your working to compute the value of the multiplier: C=c0+c1(1−t)Y I=a0−a1r G=g0−g1Y X=x0 M= m0+m1Y c0=3.71, c1= 0.55, t= 0.78, a0= 4.83, a1= 0.57, g0= 9.31, g1= 0.05, x0= 2.46, m0= 6.19 and m1= 0.3

In an economy, as per the aggregate income identity : Y=C+I+G+X−M. Assuming the following relations exist and values given, show your working to compute the value of the multiplier: C=c0+c1(1−t)Y I=a0−a1r G=g0−g1Y X=x0 M= m0+m1Y c0=3.71, c1= 0.55, t= 0.78, a0= 4.83, a1= 0.57, g0= 9.31, g1= 0.05, x0= 2.46, m0= 6.19 and m1= 0.3

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 7E

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