Solve for the equilibrium output

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Reference no: EM13232163

Consider the following model:

i) C =1500 +mpc(Y –tY)

ii) I=800

iii) G=500

iv) X-M = 500 –mpi (Y)

where:

t=the (flat) tax rate

mpc= the marginal propensity to consume

mpi= the marginal propensity to import

Suppose, mpc = .80, t =.25, mpi=.2

 Given the information above, solve for the equilibrium output:

Reference no: EM13232163

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