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15.2.2 15.2.1 Consider the following macroeconomic model: Y = C+1, C = a +by (a >...

15.2.2
15.2.1 Consider the following macroeconomic model: Y = C+1, C = a +by (a > 0, 0<b< 1). The endogenous variables Y and C are n
15.2.1 Consider the following macroeconomic model: Y = C+1, C = a +by (a > 0, 0<b< 1). The endogenous variables Y and C are national income and consumption respec- tively, and the exogenous variable I is investment. Find the equilibrium values of Y and C in terms of I and the parameters a, b. Find also an expression for the change in Y when I increases from Io to I1, determine its sign and comment on its magnitude. 15.2.2 Now consider the following non-linear version of the model in Exercise 15.2.1: Y = C+1, C = f(Y) (0 < f'(Y) < 1). Find dy/dl, determine its sign and comment on its magnitude.
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15.2.1 Y=C+1 C = a +by, a>0, 0<b<1 => Y = a +by+1 => Y = al(1-b) + 1/(1-b) = (a + 17/(1 - b) > C= a + b{al(1-b) + 1/(1-b)} =

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