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(Solved): b. Calculate the equilibrium level of national income in this three-sector economy. Calculate the c ...
b. Calculate the equilibrium level of national income in this three-sector economy. Calculate the consumption expenditure, Tax, saving at the equilibrium level. c. How about government budget? If this economy decides to reduce the Exports by 100 , what would the new level of equilibrium income?
Expert Answer
The equation of aggregate expenditure is given byAE=C+I+G+NX=C+I+G+(EX?IM)=300+0.8(Y?t×Y)+260+200+(380?m×Y)=1,140+Y×(1?t)×0.8?m×Y also given at m = 0.