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Compute the ae function and plot it in a diagram

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Reference no: EM132406053

Suppose you have the following equations for a macroeconomic model:

C = 50 + 0.7Y

D

I = 75

G = 100

T = 0.2Y

X = 50

IM = 0.15Y

a) Compute the AE function and plot it in a diagram. What is total autonomous expenditure?

b) What is the slope of the AE function?

c) Compute the equilibrium level of national income.

d) Suppose X rises from 50 to 100. How does this affect the level of national income?

e) What is the simple multiplier in this model?

Reference no: EM132406053

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