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4. (12 points) Assume that GDP (Y) is 5000. Consumption (C) is given by the equation C = 1200 + 0.3(Y – T) – 50r, where r is(b) What are the values of private saving, public saving, and national saving? (c) Now assume there is a technological innova

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Answer #1

GDP = Y = 5000; C = 1200+ 0.3(Y-T) - 50r; 1 = 1500 - 50r; T = 1000; G = 1500 For New Equilibrium Y = C +1+G Y = 2400 - 50r +

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