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If the tax multiplier in Japan is -0.57: (a) What is the value of the expenditure multiplier? (b) If Japan decided to increase autonomous government
If the tax multiplier in Japan is -0.57: (a) What is the value of the expenditure multiplier? (b) If Japan decided to increase autonomous government spending by 150 billion yen1 and to change autonomous taxes so that there was no change in GDP, what would be the change in autonomous taxes? Assume that no other variables in the IS curve changed at that time.
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