Suppose the economy is four sectors economy. The economy is represented by the following: C = 400 + 0.40Yd G= 40 I = 25 T= 5 NX = - 25 where; C = Consumption G= Government Expenditure I= Investment T= Tax NX = Net Exports
Suppose the economy is four sectors economy. The economy is represented by the following: C = 400 + 0.40Yd G= 40 I = 25 T= 5 NX = - 25 where; C = Consumption G= Government Expenditure I= Investment T= Tax NX = Net Exports
Chapter9: Aggregate Expenditures
Section: Chapter Questions
Problem 7E
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Suppose that imports decreases by 10 and the other components remain. Will the level of saving and consumption change as the economy adjusts to this change in imports? Explain.
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