As an elected official, you have been informed that real GDP is below its potential and that
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Question:
As an elected official, you have been informed that real GDP is below its potential and that action should be taken to encourage economic growth and bring the economy to its long-run equilibrium. The marginal propensity to consume is 0.7, and the amount of new government spending is $600billion. What is the multiplier? Compute this to the first place beyond the decimal. ______
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