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Consider an economy with no trade (closed economy), where the marginal propensit...
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Consider an economy with no trade (closed economy), where the marginal propensity to consume (MPC) is 0.85.
Autonomous expenditures are
C = 500 G$
I = 200 G$
G = 150 G$
(G$ = billions of dollars)
What would be the equilibrium level of income (Y), where Y=AE ?
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