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Prior to the COVID-19 pandemic, South Africa's national income was reported at R3 billion, and in 2021, owing to restrictions implemented to ease the spread

Prior to the COVID-19 pandemic, South Africa's national income was reported at R3 billion, and in 2021, owing to restrictions implemented to ease the spread of infections, national income reduced to R1.5 billion. Assume that the marginal propensity to save equals 0.3. a) By how much should government spending be increased to bring output/or income to its prepandemic levels? [7 marks b) is your answer greater, or less, than the change in income and why? [3 marks].

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