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Unformatted text preview: The tax multiplier is the derivative of Y wrt To which is -b/(1 b + bt + m) Compare these multipliers with the multipliers in the closed economy in the previous slide. Appendix C, continued Note: Leakages and injections approach At equilibrium in the open economy Y = C + I + G + X M or Leakages = Injections S + T + M = I + G + X Compare this with the leakages and injections approach in the closed economy where Leakages = Injections S + T = I + G...
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This note was uploaded on 04/06/2012 for the course BUSINESS CS204, Eco taught by Professor Mr during the Spring '12 term at American University of Beirut.
- Spring '12