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In the aggregate expenditure model assume that the consumption function is given by that planned investment equals 200 and that government purchases

In the aggregate expenditure model, assume that the consumption function is given by C=800 + 0.8 (Y-Tp), that planned investment (I) equals 200, and that government purchases (G) and taxes (Tp) each equal 200. Assume that there is no import or export spending and that the marginal propensity to invest = 0. Select one: a. The equilibrium level of income is 800 b. The equilibrium level of income is 3,200 c. The equilibrium level of income is 5,200 d. The equilibrium level of income is 5,700

May 02 2020 View more View Less

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