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Q1. Find Equilibrium output/
C = 140 + 0.9 (Yd)
This is the consumption function where 140 is autonomous consumption, 0.9 is the marginal propensity to consume, and Yd is disposable (i.e. after tax income).
Yd = Y- T, where Y is national income (or
I = Investment = 400
G = Government spending = 800
X = Exports = 600
M = Imports = 0.15Y
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