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Look at this question: "Suppose Y = $200, C = $140, G = $25, x-m = -5, and T = $25. What is Sp? What is I?" Here is the answer:
Yd = Y - T | C + Sp = Y - T | Sp = Y - T - CSp = Y - C - T = 200 - 25 - 140 = $35I = Sp + (T - G) + (x-m) = $35I = $35 + 0 - 5 = $30
I got this question wrong because I never would have saidI = Sp + (T - G) + (x-m)
I would have saidI = Sp + Sb + (T - G) + (x-m)where Sb represents undistributed profits by the business sector
Why is Sb omitted?
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