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Unformatted text preview: Y = C + I + G ( 8 ) Including foreign trade, we have imports (M), which are “leakages” from the circular flow, and exports (X), which are “injections,” giving Y = C + I + G + X – M (9) Simplifying, letting net exports be NX = X – M, we have Y = C + I + G + NX (10) And substituting GDP for Y, we have, finally, GDP = C + I + G + NX (11) This is the national income identity, in expenditure form....
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This note was uploaded on 11/23/2011 for the course ECON 231 taught by Professor Staff during the Fall '09 term at Calhoun Community College.
- Fall '09
- National Income