(Answered) Consider an open economy with the following consumption and

Economics

Consider an open economy with the following consumption and tax functions: C = 5 + 0.75YD , T = 0.20Y Assume I0 = 100; G0 = 110; X0 = 90 and M0 = 105

(a) Find the equilibrium output.

(b) Is the budget in this economy balanced?

(d) Determine the change in the equilibrium output if the autonomous imports decline by 20.

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