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The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework. Assume that MPI is equal to zero.
Figure 10.4
In the figure:
C: Consumption
I1 and I2: Investment
G: Government Spending
X: Exports
-Refer to Figure 10.4. Starting at equilibrium level E3 equilibrium level E1 will be reached if aggregate expenditure:
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