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If every additional 3 percentage points in the investment rate boost GDP growth by 1% point and investment is financed with consumer saving. The economy is now characterized by
Consumption: $10 trillion
Savings (= :$2 trillion
Investment):
___________________________
GDP:$12 trillion
If the goal is to increase the growth rate by 2 percentage points,
(a) By how much must investment increase?
(b) By how much must consumption decline for this to occur?
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