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    Exam 11: Consumption, Real GDP, and the Multiplier
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    In the Keynesian Model with Government and the Foreign Sector
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In the Keynesian Model with Government and the Foreign Sector

Question 26

Question 26

Essay

In the Keynesian model with government and the foreign sector added, what are the components of spending?
Which of these components are autonomous and which are not?
How is the equilibrium found?
When the economy is not at an equilibrium, what adjustments are made?

Correct Answer:

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There are four components to spending-co...

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