Assume: Y= C + I + G + NX C = 400 + (0.8)YD Io = 200 G = 300 + (0.1)(Y* - Y) YD = Y - TA + TR NXo = - 40 TA = (0.25)Y TRo = 50 By how much would investment (Io) have to change to reach equilibrium at Y* = 3,000, and how does this change affect the budget surplus?
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Assume:
Y= C + I + G + NX
C = 400 + (0.8)YD
Io = 200
G = 300 + (0.1)(Y* - Y)
YD = Y - TA + TR
NXo = - 40
TA = (0.25)Y
TRo = 50
By how much would investment (Io) have to change to reach equilibrium at Y* = 3,000, and how does this change affect the budget surplus?
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