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Compute the equilibrium income

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Reference no: EM13323993

(a) An open macroeconomic model is represented parametrically as follows

Y= C0 +Io+Go+X0-M, M=mo+m1yd,C=co+c1yd, T=tY and Yd=Y-T

(i) Compute the equilibrium income

(ii) Derive any three multipliers

(iii) Interpret the multipliers and explain their significance in policy context

Reference no: EM13323993

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