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Mathematics, 21.06.2021 06:30 dondre54
Initially, the economy is in long-run equilibrium. The aggregate demand curve then shifts $80 billion to the left. The government wants to change spending to offset this decrease in demand. The MPC is 0.75. Suppose the effect on aggregate demand of a tax change is 3/4 as strong as the effect of a change in government expenditure. There is no crowding out and no accelerator effect. Suppose the government raises tax by an amount of y. How does that translate into the change on aggregate demand
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Initially, the economy is in long-run equilibrium. The aggregate demand curve then shifts $80 billio...
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