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In the simple Keynesian model with no government and foreign sectors, assume that the economy is in equilibrium at an output of $ 2 billion
In the simple Keynesian model with no government and foreign sectors, assume that the economy is in equilibrium at an output of $ 2 billion with a marginal propensity to consume of 0.9. If investment spending decreases by $billion, what is the new equilibrium output level?
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