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Government implements an expansionary fiscal policy

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Reference no: EM131467245

Given MPC (marginal propensity to consume) = 0.90, if the government implements an expansionary fiscal policy as

(a) cutting taxes by $10 billion, then by how much would total spending increase over an infinite period?

(b) spending $10 billion, then by how much would total spending increase over an infinite period?

Reference no: EM131467245

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