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3. Suppose that the government increases expenditures by MYR150 billion while increasing taxes by MYR150 billion. Suppose that the MP0 is 0.80 and there are

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3. Suppose that the government increases expenditures by MYR150 billion while increasing taxes by MYR150 billion. Suppose that the MP0 is 0.80 and there are no crowding out or accelerator effects. Compute the combined effect of these changes. Explain why the combined change not equal to zero. ['I'otal: 6 Marks]

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