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Assume the following macroeconomic variable (in 55 billion) for an economy: Y = national income = Aggregate Expenditures Aggregate Expenditures =...

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$220 (Answer)

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Assume the following macroeconomic variable (in 55 billion) for an economy:
Y = national income = Aggregate Expenditures Aggregate Expenditures = Consumption + Investment + Government Spending +
Net Export Assuming that the full employment level in $5,500 billion, determine the change in
government spending needed to reach full employment. (Hint: calculate the current GDP, then calculate aggregate expenditures using
national income of $5,500 and find the difference) Consumption (80% of disposable or after tax income) + C = $300 + 0.8 (Y -
$300 T) ax 20% of income Investment
Government Spending
Exports Imports 0.1 (Y - T)

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