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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 B the government multiplier is the marginal tax rate is the current budget deficit is B
If the government wants to increase GDP increase to B it can increase government spending G by
Billion. The budget deficit will increase to
Billion
Round your answers to the nearest 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 Y 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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