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Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66. If autonomous exports have just fallen by $20, what will happen to equilibrium income? What about unemployment? Show the adjustment process to the new equilibrium using a graph.
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2.2 "Our business model works even if all internet software is free ....... We are still selling operating systems. What does Netscape''s business model look like? Not very good."
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Aggregate demand and Say's Law Y D = Y S in the classical model (Say's law) Aggregate demand Y D is defined as quantity of nationally produced
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