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Assume that the multiplier in the United States is 2 and that a major slump in Europe would reduce output and imports from the U.S.
Assume that the multiplier in the United States is 2 and that a major slump in Europe would reduce output and imports from the U.S. by 5% (relative to its normal level). Given your answer to part (a), what is the impact on U.S. GDP of the European Slump?
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