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Assume that Equilibrium Real GDP is $20,000 while target Real GDP is $15,000. The marginal propensity to consume is 9/10. Assume that government decides to

Assume that Equilibrium Real GDP is $20,000 while target Real GDP is $15,000. The marginal propensity to consume is 9/10. Assume that government decides to lower taxes by $1,000. To pay for this, it lowers government purchases G by $1,000. As a result of these two changes, what is the new Equilibrium Real GDP? a. $19,000 b. $20,000 c. $21,000 d. $14,000 once. $1,000

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