Unformatted text preview: MPS. b) Find equilibrium GDP (Y*) in Blahnik. c) Find equilibrium consumption, government savings, and capital inflows. d) Find private savings, using the fact that leakages must equal injections in equilibrium. Does this equal the value that we would get if we plugged Y* directly into our savings function from part a? e) How much does Y* increase if President Manolo decides to increase autonomous government spending by $100? (warning: this problem is very challenging)...
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- Spring '08
- Macroeconomics, marginal propensity, government spending, Blahnik, autonomous government spending, Discussion Section Handout