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Mathematics, 30.10.2021 14:00 jogose6

(Advanced Analysis) Assume that the consumption schedule for a private open economy is such that consumption is as follows: C=60 + 0.75 Y Assume further that planned investment /g and net exports X, are independent of the level of real GDP and constant at: lg= 40 Xx=10 Recall also that, in equilibrium, the real output produced (M) is equal to aggregate expenditures: Y= C + /g+ Xp a. What is the equilibrium level of income or real GDP for this economy? $ I b. What happens to equilibrium Y if /g changes to 20 ? Y = $ What does this outcome reveal about the size of the multiplier? The multiplier:

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