Question
Consider a closed classical economy where the government increases taxes by $800million. If the marginal propensity to consume is 0.75, describe what happens to the
Consider a closed classical economy where the government increases taxes by $800million. If the marginal propensity to consume is 0.75, describe what happens to the following. Please be sure to indicate the magnitude of any change. Show work for each one!
(a) Public saving
(b) Private saving
(c) National saving
(d) Investment
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Macroeconomics
Authors: Charles I. Jones
3rd edition
978-0393123944, 393123944, 393923908, 978-0393923902
