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In the Keynesian cross, assume that the consumption function is given byC = 500 + 0.8 (Y –

In the Keynesian cross, assume that the consumption function is given byC = 500 + 0.8 (Y –

a Suppose that the real interest rate (r) is 5. Write the equation of the plannedexpenditure ( PE,). Draw planned expenditure ( PE,) as a function of income. Label thisgraph “figure 1”.

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