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Imagine that the government was concerned about spending more on government spending than it was collecting in taxes. They decide to instead run a balanced
Imagine that the government was concerned about spending more on government spending than it was collecting in taxes. They decide to instead run a balanced budget. Because they view government spending to be wasteful, the decide to set G equal to 50. Solve for the new equilibrium level of output.
Imagine that the economy can be modeled as follows:
C = 250 + .8Yd
I = 200
G = 50
T = 50
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