1. A Keynesian model of the closed economy is described by the following equations
Y = C + I + G
where
C = bYd
Yd = Y + TR - T
TR =
T =
I =
G =
(a) Derive, from first principles, the equilibrium level of income.
(b) Derive the Keynesian expenditure multiplier.
(c) If T = tY, derive the equilibrium level of income.