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Unplanned Investment=
Y-AE
equilibrium
Y=AE
AE=
C+I+G+Xn
S=
Yd-C
C=
Ca+(MPC)(Yd)
Macro equilibrium
I+G+X=S+T=M
Spending withdrawals
savings, taxes, and imports
Spending injections
investment, gov spending, and exports
spending multiplier
1/(1-MPC)
tax multiplier
-MPC/1-MPC
Balanced Budget Multiplier
(deltaG=deltaT)=1
deltaY=
Multiplier * delta(gov spending or taxes)
Equilibrium Y=
[1/(1-MPC)][a+I+G+Xn-(MPC)T