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In the two-sector model, how is total autonomous expenditure A obtained?
AAdd C-bar and I-bar
BSubtract S from C-bar
CAdd cY and savings
DMultiply I-bar by c
Answer & Solution
Correct answer: A. Add C-bar and I-bar
A is the sum of the two autonomous terms, C-bar and I-bar, which do not depend on income.
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