Assume economy that consists of consumers and government

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Assume an economy that consists of consumers, government, business investors and an international sector. we will express this economy this way C+I+G+X=GDP Assume that the MPS is .3 How much can we expect the economy to expand if goverment increases its spending by $100B and at the same time,Congress imposes tax increases of the same amount ($100B) to pay to the increased spending and that tax increase causes C to fall by $70B?

Reference no: EM131101592

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