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Consider an open-economy where the marginal propensity to consume is 0.71, the marginal tax rate is 0.25, and the marginal propensity to import 0.22. Suppose
Consider an open-economy where the marginal propensity to consume is 0.71, the marginal tax rate is 0.25, and the marginal propensity to import 0.22. Suppose that when price level goes from 100 to 110, consumption would decrease by $13 billion dollars, and net export would decrease by $19 billion dollars. What is the change equilibrium desired spending when price goes from 100 to 110?
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