Which variables are endogenous and exogenous

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Reference no: EM13202157

Suppose the national-income model:
Y = C + I + G
C = a + b(Y - T)(a > 0; 0 < b < 1)
T = d + tY (d > 0; 0 < t < 1)
Where Y is national-income, C is consumption, I is investment, G is government expenditure, T is tax, t is income tax rate, a;b and d are parameters.
i) Which variables are endogenous, which variables are exogenous.
ii) Find equilibrium national-income Y*, tax T* and consumption C*.
iii) Suppose a = 25, b = 0.3; t = 0.1, d = 50, I = 16 and G = 14, calculate Y*,T*, and C*.

Reference no: EM13202157

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