Suppose the marginal propensity to consume

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a. Suppose the marginal propensity to consume (MPC) for a nation is 0.7. What is the tax multiplier for this nation?

b. What is the tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450?

c. How much will real GDP change if the tax multiplier is –9 and taxes are reduced by $200?

Reference no: EM131169429

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