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The values below are in billions of dollars.
C = $800
I= $100
G=$200
IM= $150
Ex=$100
a. What is output?
b. If taxes (T) are $100 billion, what is private savings?
c. Now assume that imports increase from $150 billion to $200 billion. Show three different ways that this can change the expanded savings/investment identity.
d. If exports increased from $100 billion to $200 billion how would the savings/investment identity change? (you probably need to think about this in two steps).
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Important information regarding calculating elasticity for each of the given variables
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