Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Assume you have the following model of the expenditure sector:
AD = C + I + G + NX
C = Co + cYD
YD = Y - TA + TR
TA = TAo
TR = TRo
I = Io
G = Go
NX = NXo
If a change in income by ∆Y = - 800 leads to a change in savings by ∆S = - 160, what is the size of the expenditure multiplier?
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