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In a particular economy, a $20 billion increase in planned investment moved the economy from an initial situation with no output gap to a situation
In a particular economy, a $20 billion increase in planned investment moved the economy from an initial situation with no output gap to a situation with an expansionary gap. Describe a tax policy capable of offsetting this expansionary gap. Assume that the marginal propensity to consume equals 0.5. Your answer must be specific and should be no more than a very brief paragraph.
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