What changes in government spending yield desired level

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Suppose the initially, real GDP is $14 trillion. The government wishes to increase real GDP to $15 trillion. The marginal propensity to consume (MPC) is 0.8 and every $1.00 increase in real government spending crowds out $0.50 in real plan investment expenditures. What changes in government spending (Increase or Decrease) could yield the desired level of real GDP?

Reference no: EM13837905

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