Adding Investment

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Unformatted text preview: t in high equilibrium GDP. Use Table 10-3 p. 176 for data. Key Graph p. 177 Aggregate Expenditure-Domestic Output Approach C+Ig+Xn+G C+Ig+X C + Ig + Xn + G G C $20B Increase of $20B in G will create $80B in Real GDP Ig+Xn $80B 470 550 29 Real GDP Taxation and Equilibrium Taxes cause DI to fall short of GDP by the amount of the tax; reduces both consumption and saving at each level of GDP. The size of the reduction is determined by the MPC and MPS. √ Assume a lump-sum tax, constant amount at each lev...
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This note was uploaded on 01/30/2014 for the course ECON 259 taught by Professor Geanakopolis during the Fall '10 term at Purdue University-West Lafayette.

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