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Assume that out of every dollar of disposable income generated by increased governmentspending/purchases, individuals collectively spend one-fourth, or 25 cents on consumption purchases.This means that
Assume that out of every dollar of disposable income generated by increased governmentspending/purchases, individuals collectively spend one-fourth, or 25 cents on consumption purchases.This means that the MPC is 1/4.If government spending was $15 billion, calculate the total impact of this initial increase in government purchases on additional consumption.B.Discuss the three reasons that we discussed in class for holding money (the demand for money)
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