Home / Questions / The structural model of an economy is given as below C 400 0.8Yd Consumption function I=35...
The structural model of an economy is given as below
C=400+0.8Yd Consumption function
I=350 Investment
G=450 Government expenditure
T=200 Tax
i) Derive the savings function (2 marks)
ii) Derive the government expenditure and tax multiplier (4 marks)
iii) Compute equilibrium income and consumption (4 marks)
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