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Given:
C = 2000 + 0.8Yd
I = 400
Yf = 14000
1. What is the equilibrium level of income?
2. Is there an inflationary or a deflationary gap? Why? What is its magnitude?
3. What is the value of the government expenditures multiplier?
4. What is the value of G that would move the economy to full employment at Yf?
5. What is the resulting budgetary deficit?
6. What is the multiplier for a lump-sum tax?
7. What is the balanced-budget multiplier?
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