Unformatted text preview: increased by 50 too so that there is a balanced budget. What is the new equilibrium income? What is the balanced budget multiplier? e. Now let us go back to the original equilibrium with C = 100 + 0.90*(Y-T), G=T=100 and I=100. If there is decrease in autonomous consumption so that the new function is C = 50 + 0.90*(Y-T), what is the new equilibrium income? C? S?...
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- Fall '08
- Macroeconomics, Keynesian economics, new equilibrium income