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Assume that the consumption function is given byC= 0.65(YT). Output is $6,000, taxes are $900, and government spending is $1,000. Suppose the government lowers taxes

Assume that the consumption function is given byC= 0.65(YT). Output is $6,000, taxes are $900, and government spending is $1,000. Suppose the government lowers taxes to 500. What is the impact on equilibrium investment?

A. are unchanged
B. increase by $200
C. decrease by $325
D. none of the above

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