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2.Assume the following information represents the National Income Model of a hypothetical economy.

Y = C + I + G,C = a + b(Y – T),T = d + tY, I = I0,G = G0

Where a > 0; 0 < b < 1,d > 0; 0 < t < 1,T = Taxes, I = Investment ,G = Government Expenditure

Explain the economic interpretation of the parameters a,b,d and t.

Find the expression of equilibrium income, consumption and taxes

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