2. Assume the following equations summarize the structure of an economy. C=C,+0.85 (Y - T) Ca = 260 – 10r T= 200 + 0.2Y (M/ P)d = 0.25Y – 25r

Macroeconomics: Private and Public Choice (MindTap Course List)
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Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics
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Compute the value of the multiplier. Note: in this model, net exports and taxes are NOT
a.
autonomous, so you cannot use the same formula as before. You will need to find Ep=Ap + hY,
Transcribed Image Text:Compute the value of the multiplier. Note: in this model, net exports and taxes are NOT a. autonomous, so you cannot use the same formula as before. You will need to find Ep=Ap + hY,
2. Assume the following equations summarize the structure of an economy.
C= Ca+0.85 (Y –T)
Ca= 260 – 10r
T= 200 + 0.2Y
(M/ P)d = 0.25Y – 25r
M /P = 2,125
Ip = 1,500 – 30r
G=1,700
NX = 500 – 0.08Y
Transcribed Image Text:2. Assume the following equations summarize the structure of an economy. C= Ca+0.85 (Y –T) Ca= 260 – 10r T= 200 + 0.2Y (M/ P)d = 0.25Y – 25r M /P = 2,125 Ip = 1,500 – 30r G=1,700 NX = 500 – 0.08Y
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