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(Solved): The equilibrium income of an economy is 2000. The income tax rate is 20% and the marginal propensity ...



The equilibrium income of an economy is 2000. The income tax rate is 20% and the marginal propensity to consume is 0.85. For every 100 increase in income the tendency is to spend 10 on imports. If the government expenditure increases by 200, what is new equilibrium output?



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