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In a closed economy, consider the aggregate income is , consumption ( ) is the sum of autonomous consumption and the part of consumption that depends on the disposable income, fixed investment is , and government spending is . If the country's tax rate is, then what is the amount of private savings and public savings? From the national income identity for the above economy, show that the national savings is the sum of private savings and public savings, and is identical to the fixed investment.
Note: If you derive the identity from lump-sum taxes, you have to estimate the amount of lump-sum tax given the information above.
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