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In a two sector economy, the saving fu...

In a two sector economy, the saving function is given as: S `=-10+ 0.2Y` and investment function is , expressed as: `l=- 3+0.1Y.` Calculate the equilibrium level of income ?

Text Solution

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Equilibrium level of income (Y) is attained when S `=l.` lt means:
`-10+0.2Y=-3+0.1Y`
`0.2Y-01Y=-3+10`
`0.1Y=7`
Y=70
Equilibrium level of Income =70
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