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Economics

Assume the following model of expenditure sector:

Sp = C + I + G + NX
C = 420 + (4/5)YD
YD = Y - TA + TR
TA = (1/6)Y
TR0 = 100
I0 = 160
G0 = 180
NX0 = -40

a) If the government would like to increase the equilibrium level of output (Y) to the full-employment level Y* = 2,700, by how much should government purchases (G) be changed?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M954705

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