Consider the following economy C=1000+0.4(Y-T) I=500 T=400 G=300 What is the investment of equilibrium?
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We can use the equation for aggregate expenditure (AE) to do this: AE = C + I + G AE = (1000 + 0.4(Y - 400)) + 500 + 300 AE = 1000 + 0.4Y - 160 + 500 + 300 AE = 1640 + 0.4Y Show more…
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