I can't figure out the steps to this equation for the national income model.
It seems simple, but I don't see why in step 4 I don't get Y-bY+tY
I thought it was a mistake in the book at first, but that would make the whole model wrong, so is there something I am missing?
Y = C+I+G
Y = a+b(Y-tY)+I+G
Y-b(Y-tY)= a+I+G
Y-bY-btY = a+I+G (I'm lost here, why isn't it Y-bY+btY?)
Y(1-b-bt) = a+I+G
Y(1-b(1-t)) = a+I+G
Ye = a+I+G / 1-b(1-t)
Thanks for the help!
There is a mistake in the book at step 4, and the income equilibrium equation is correct.