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Question 91 1 pts Suppose: Z=C+l+G, YD=Y -T, C = 300 + 0.5YD, T= 1600, I =200 and G-2000. Given these variables, the equilibr
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Answer #1

Ans.91. e. 3400

At the equilibrium, Y=AE

Y= Z= (C+I+G)

Y= C+I+G

Y= 300+0.5YD + 200 + 2000

Y= 300 +0.5 (Y-T) +200 + 2000

Y= 2500 + 0.5 ( Y - 1600)

Y= 2500 + 0.5Y - 800

Y - 0.5Y= 1,700

0.5 Y = 1,700

Y = $3400

Hence, the equilibrium level of output in this economy is $3400.

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