In a closedeconomy, consumers spend $100 100 regardless of the level ofincome, and the marginal propensity to
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Question:
In a closedeconomy, consumers spend $100
100 regardless of the level ofincome, and the marginal propensity to consume(MPC) is 0.75
0.75. Investment is equal to $300
300. The government spends $500
500 and collects $200
200 in taxes.
What is the equilibrium level of GDP in this economy?
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