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1. In the neoclassical economy, suppose MPC =0.7. For each of the following, (i) Compute AS (change in the national saving) when government purchases increase

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1. In the neoclassical economy, suppose MPC =0.7. For each of the following, (i) Compute AS (change in the national saving) when government purchases increase by 1000 (AG = 1000) (ii) Compute AC (change in consumption expenditure) and AS when taxes increase by 1000 (AT = 1000)

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