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For the following five questions, use the IS curve given below: Y = 0.06 - 1.5r. Assume potential output is $2250. Following the shock to
For the following five questions, use the IS curve given below: Y = 0.06 - 1.5r. Assume potential output is $2250. Following the shock to the risk premium and the central bank lowering the risk-free rate, the federal government decides to increase spending. By increasing their spending by $27, the new output gap jumps to 1.75%. What must be the marginal propensity to consume
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