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Suppose marginal propensity to consume is 0.75 and there is a 20% proportional income tax. Find the change in equilibrium income for the following: (i) Government purchases increase by 20 (ii) Transfers decrease by 20 |
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Answer» Suppose marginal propensity to consume is 0.75 and there is a 20% proportional income tax. Find the change in equilibrium income for the following: (i) Government purchases increase by 20 (ii) Transfers decrease by 20 |
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