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Government pay for the new spending

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Reference no: EM131046267

Given:

Y= 5,000,000
C= 4,000,000
I= 1,000,000
G= 0
T = 0

Suppose MPC=0.75 and the government pay for the new spending of 100,000 by increasing taxes by 100,000. Calculate the new Y. Could you provide the answer with specific formulas if possible?

Reference no: EM131046267

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