n a closed economy:
$C = c_0 + c_1Y_D$
$Y_D = Y - T$
$I = a_0 + a_1Y - a_2i$
where C is consumption, $Y_D$ is disposable income, Y is income, I is
investment and i is the interest rate. Also, assume that government
spending, G, and taxes, T, are both exogenous. The remaining para
are all positive and exogenous; in particular, $c_0$ defines the autonor
of consumption, $0 < c_1 < 1$ the marginal propensity to consume, $a_0$
autonomous part of investment, $0 < a_1 < 1$ the impact of current o
vestment, and $a_2$ the interest sensitivity of investment.
