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27-12-2022
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5. Let the national- income model be: Y = C + I0 + G) C= a+b +b(Y- T0) (a ˃ 0, 0 ˂ b ˂ 1) G = gy (0 ˂ g ˂ 1) (a) Identify the endogenous variables. (b) Give the economic meaning of the parameter g. (c) Find the equilibrium national income. (d) What restriction on the parameters is needed for a solution to exits?

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