Asked by Eve
                a) Suppose the economy is characterized by the following behavioral equations: 
C = c0 + c1YD
YD = Y – T
I = b0 + b1Y
Government spending is constant. Note that investment now increases with output. Chapter 5 will discuss the reasons for this relation. Solve for equilibrium output.
            
            
        C = c0 + c1YD
YD = Y – T
I = b0 + b1Y
Government spending is constant. Note that investment now increases with output. Chapter 5 will discuss the reasons for this relation. Solve for equilibrium output.
Answers
                    Answered by
            Anonymous
            
    Y=(I-b0)/b1
    
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