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1b. Please calculate the expenditure multiplier, if the marginal propensity to consume = .80, the tax rate = .25 and the marginal propensity to import
1b. Please calculate the expenditure multiplier, if the marginal propensity to consume = .80, the tax rate = .25 and the marginal propensity to import = .1 (10 pts)
1c) Please show in two side by side graphs the connection between the multiplier and the AE curve (aggregate expenditure curve). Suggestion: use a different value for the multiplier in each graph and show how a decrease in AE will impact Real GDP. What determines the slope of the AE line? (20 pts)
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