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    Fredonia has the following consumption function

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    A. Find the equlibrium level of GDP

    b. How much is saves? Is savings equal to investment?

    c. Now suppose that an export-promotion drive succeeds in raising net exports to $100. Answer (a) and (b) under these new circumstances.

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    Solution Summary

    The equilibrium level of GDP is found. The equal investment savings are analyzed.

    $2.49

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