Recall that the Keynesian spending multiplier equals 1/ (1 - MPC). Suppose that in panel (a) of

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Recall that the Keynesian spending multiplier equals 1/ (1 - MPC). Suppose that in panel (a) of Figure 13-1, the government determined that the amount by which the AD curve had to be shifted directly rightward from point E 1 was equal to $1.0 trillion. If the government decided that a $0.2 trillion increase in real government spending was required to generate this shift, what must be the value of the MPC?
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