What is the value of g which corresponds to the multiplier

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Continue with the same equations.

a. What is the value of G which corresponds to the simple multiplier (with taxes) of Chapter 9 ?

b. By how much does an increase in government spending of ? --G increase the level of income in this model, which includes the money market?

c. By how much does a change in government spending of ? --G affect the equilibrium interest rate? d. Explain the difference between your answers to parts ( a ) and ( b ).

Reference no: EM131136551

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