The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc) = 0.75
∙ net tax rate (t) = 0.20
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars. 
FIGURE 22-2
-Refer to Figure 22-2.What is the equilibrium national income in this economy?
Definitions:
Multidimensional Model
A framework that explains phenomena or behaviors by considering multiple factors and their interrelations.
Microsystem
In Bronfenbrenner’s bioecological model, the immediate environment where proximal processes are played out.
Bronfenbrenner
Refers to Urie Bronfenbrenner, a psychologist renowned for his Ecological Systems Theory, emphasizing the impact of various environmental systems on child development.
Life Span
The maximum duration of life of a living organism or the period from birth to death, considering all factors affecting its life cycle.
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