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In the goods market, given that c o = R100, I= R250, G = R300, c = , T = R100 and Y F =

In the goods market, given that co = R100, I= R250, G = R300, c = , T = R100 and YF = R3 000 the equilibrium level of income is ___ and in order to reach the full-employment level of income, government spending (G) must increase by ____ or taxes (T) must decrease by ____.

  • A.

R2 200; G must increase by R175; or T must decrease by R233.33

  • B.

R2 200; G must increase by R200; or T must decrease by R266.67

  • C.

R2 300; G must increase by R200; or T must decrease by R266.67

  • D.

R2 300; G must increase by R175; or T must decrease by R233.33

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