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Assume a Two Sector Economy Where C = $100

question 34

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Assume a two sector economy where C = $100 + .9Y and I = $50. Calculate the equilibrium level of output for this hypothetical economy. What would the level of consumption be if the economy were operating at 1400? What would be the amount of unplanned investment at this level? In which direction would you expect the economy to move to at $1400 and why?


Definitions:

Triarchic Theory

A theory of intelligence proposed by Robert Sternberg that suggests intelligence can be divided into three aspects: analytical, creative, and practical.

Robert Sternberg

An American psychologist known for his theory on intelligence and creativity, including the triarchic theory of intelligence.

Intelligence

The ability to acquire and apply knowledge and skills.

Xerox Machine

A brand of photocopier that uses a dry copying process to reproduce documents and images.

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