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1 . In the economy with marginal propensity of consumption at 0 . 6 and marginal propensity of demand for imports at 0 . 4

1. In the economy with marginal propensity of consumption at 0.6 and marginal propensity of demand for imports at 0.4, the government considers an increase of spending by 100bn liras. The share of tax revenues in GDP is 30%. Government bonds are sold with the discount rate of 6%.
a. What is the value of fiscal multiplier?
b. What is the amount of public debt accumulation?
b. What is the tax burden over periods 1(debt accumulation) and 2(debt service)?

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