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Consider an economy in which the current level of GDP is 5 0 0 B , the government multiplier is 2 , the marginal tax

Consider an economy in which the current level of GDP is 500B, the government multiplier is 2, the marginal tax rate is 10%, the current budget deficit is 5B.
If the government wants to increase GDP increase to 525B, it can increase government spending G by __
__Billion. The budget deficit will increase to __
___Billion .
Round your answers to the nearest 2 decimal points. Do not include a dollar sign or billion indicator B.
Hint and note: This problem is looking for a change in government spending (A) and the new budget deficit (B). To help you out, the budget deficit is G T. The change in the deficit in this problem will be G -.10Y, where G is the change in government spending and Y is the change in GDP. When recording the new budget, dont forget to include the original budget deficit!

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