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Assume that a hypothetical economy with an MPC of 0.65 is currently facing demand-pull inflation. The government is projecting that the problem can be resolved

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Assume that a hypothetical economy with an MPC of 0.65 is currently facing demand-pull inflation. The government is projecting that the problem can be resolved by targeting RM 10 billion decline in aggregate demand. a Determine the amount of government spending to be reduced to achieve this target. b) Given that government opt for tax instead of its spending, determine the size of tax increase to achieve the same target

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