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In the aggregate demand model in equilibrium, GDP (Y) = C +I+X (open economy). Where C+ consumption schedule+100+.75Y (consumption is a function of income). Where I+ planned investment+20 and X + net exports+40. Both are independent of GDP (Y). Use the information provided to complete the following: Calculate the equilibrium level of income or real GDP for this economy. What happens to equilibrium Y if Ig changes to 15? What does this outcome reveal about the size of the multiplier?

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Operation Management, Management Studies

Category:- Operation Management
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