Compute the impact of a decrease in taxes equal to 100

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Reference no: EM13205846

Suppose:

C = 500 + 0.80 (Y - 400)
I = 400
G = 400
(X - M) = -100

• Solve the problem for I (income).
• The impact on income of an increase in government spending equal to 100.
• Using the original data, compute the impact of a decrease in taxes equal to 100.
• Explain why the results are different.

Reference no: EM13205846

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