Determine a simple macro model with demand


Determine a simple macro model with demand-determined output. Explain which of the following parameters will form the strongest automatic stabilizer?

1. MPC = 0.7, t = 0.3, m = 0.2

2. MPC = 0.9, t = 0.2, m = 0.4

3. MPC = 0.8, t = 0.1, m = 0.2

4. MPC = 0.7, t = 0.1, m = 0.4

5. MPC = 0.8, t = 0.2, m = 0.3

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Macroeconomics: Determine a simple macro model with demand
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