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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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- Fall '09
- National Income