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In the simple model of a national economy:

In the simple model of a national economy:

Calculus: Early Transcendentals
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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(a) In the simple model of a national economy: Y=C+I+G I= 25; G = 25 T = 0.2Y C = 0.6 Yd where Y is income, Y₁ is disposable income, T is tax, C is consumption. G and I are not variables of the model but are values set by Government and other non-governmental sectors. (i) What type of variables are G and I? (ii) Write Y in terms of C by substituting for I and G. (iii) (iv) Find C in terms of Y only using the Tax and Consumption equations. Use your answers to (ii) and (iii) to write the system of two simultaneous equations in Y and C in matrix form. [Do not solve the equations].
Transcribed Image Text:(a) In the simple model of a national economy: Y=C+I+G I= 25; G = 25 T = 0.2Y C = 0.6 Yd where Y is income, Y₁ is disposable income, T is tax, C is consumption. G and I are not variables of the model but are values set by Government and other non-governmental sectors. (i) What type of variables are G and I? (ii) Write Y in terms of C by substituting for I and G. (iii) (iv) Find C in terms of Y only using the Tax and Consumption equations. Use your answers to (ii) and (iii) to write the system of two simultaneous equations in Y and C in matrix form. [Do not solve the equations].
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