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Assume that the national income model is specified as: Y = C + I0 + G0 , C = C0 + bY D , T = tY

(a) Identify the endogenous and exogenous variables and the parameters.

(b) Determine the equilibrium national income and the multiplier.

(c) What restrictions on the model's parameters are needed in order for the model to have a meaningful solution?

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