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You are given the following information on the macroeconomy (in millions dollars): Consum

You are given the following information on the macroeconomy (in millions dollars): Consum

You are given the following information on the macroeconomy (in millions dollars):

Consumption:250 + 0.50Y

Investment:100 + 0.10Y

Government Spending400

Exports50

Imports50 + 0.25Y

 

Compute the equilibrium level of income, the size of the multiplier, and the change in equilibrium income for a decrease in autonomous investment of $75 million.

103) Briefly discuss the relationship between leakages and the size of the multiplier.

Abhinav 07-Dec-2019

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