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19 March, 06:19

Suppose that the government of Ansonia is experiencing a large budget surplus with fixed government expenditures of G = 200 and fixed taxes of T = 150. Both G and T are independent of income. Assume that consumers of Ansonia behave as described in the following consumption function. C = 300 +0.80 (Y- T) Suppose further that investment spending is fixed at I = 200Calculate the equilibrium level of GDP in Ansonia. Solve for equilibrium levels of Y, C, and S

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  1. 19 March, 07:07
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    Answer:$3400

    Explanation:

    Y = C + I + G

    Y = $300 + 0.8 (Y - 150) + $200 + $200

    Y = 680 + 0.8Y

    0.2Y = 680

    Y = $3400
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