Posted by: clairvoyant December 15, 2005
for the economists ;)
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Y = C+I+G+X-IM Since there is no government and international sector, G=o, X=0, and IM=0 Now, Y = C+I Y= a+bY+I where autonomous consumption=0, Y-bY = I Y(1-b) = I b=change in consumption/change in income =0.5 Therefore equilibrium income = I/1-b =50/1-0.5 =100.
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