Answer to Question #12961 in Macroeconomics for Rachel
Where C is consumption, Yd is disposable income (equal to national income, Y, in absence of a government sector), and I is investment.
a) If aggregate expenditures (AE) are a function of Y, calculate the equilibrium level of income.
b) Calculate the value of the multiplier.
b) Multiplier 1/(1-MPC)= 1/0.6=1.67
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