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In an open economy, the marginal propensity to consume out of total income is 0.8 and there are no income taxes. The marginal propensity to
In an open economy, the marginal propensity to consume out of total income is 0.8 and there are no income taxes. The marginal propensity to import is 0.2. If both government spending and exogenous taxation are increased by 100, equilibrium income A) increases by 125. B) increases by 100. C) falls by 100. D) remains unchanged
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