Consider the specific Macroeconomic model involving: Private sector consumption: C = 2400+0.8(Y-T); Y = GDP, T = Taxes Tax function: T = 125+0.12Y Business sector investment: I =67+0.08r; r = Rate of interest Government spending: G = 788 Exports: X = 192 - 28x; x = Exchange rate Imports: M = 345+0.09Y+2x; Y = GDP, x = Exchange rate Solve this model for the value of the equilibrium GDP (Y*), given that the interest rate is 7%, and exchange rate is $1.18.

Consider the specific Macroeconomic model involving: Private sector consumption: C = 2400+0.8(Y-T); Y = GDP, T = Taxes Tax function: T = 125+0.12Y Business sector investment: I =67+0.08r; r = Rate of interest Government spending: G = 788 Exports: X = 192 - 28x; x = Exchange rate Imports: M = 345+0.09Y+2x; Y = GDP, x = Exchange rate Solve this model for the value of the equilibrium GDP (Y*), given that the interest rate is 7%, and exchange rate is $1.18.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 4SQ

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