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{"ops":[{"insert":"Exercise 1.4 Output and income are in equilibrium when planned expenditures AE are equal to national income, Y, in other words, meaning Y = AE. (a) Suppose the AE function is AE = 165 + 0.8Y. Draw a diagram showing the aggregate expenditure function. (b) In your diagram draw the 45\u25e6 line that shows all points at which national income and aggregate expenditures are equal (Y = AE) (c) Using your diagram, or a numerical example, or an algebraic solution, find equilibrium output and income in this example and show it in the diagram.\n\n"}]}
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