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At equilibrium income of 560 with X = 90 and M = 50 + 0.05Y, net exports equal what?
A12
B40
C62
D-12
Answer & Solution
Correct answer: A. 12
Imports are 50 plus 0.05 times 560, which is 78, so net exports are 90 minus 78, which is 12.
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