What is the equilibrium income level

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C = 40+0.5×(Y - T)

G=$215 billion, IP=$50 billion and T=$10 billion.

Y=C+IP+G

What is the equilibrium income level?

Suppose that government purchases are reduced by $100 billion. What is the new equilibrium level of income?

Based on the effect of the change in government purchases on equilibrium income, what is this economy's multiplier equal to?

Reference no: EM132140721

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