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Assume Morocco is currently operating with an unemployment rate six percent above its natural rate of unemployment. Assume that the output gap is estimated to
Assume Morocco is currently operating with an unemployment rate six percent above its natural rate of unemployment.
- Assume that the output gap is estimated to be $156 billion and the government decides to take action. If the marginal propensity to consume is 0.75, by how much would it need to change government spending to close the gap? Show your work?
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