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Problem 2. Consider the economy lacing inflationary pressure as shown In the graph with actual GDP exceeding the target GEIP. Assn me Marginal Propensity to
Problem 2. Consider the economy lacing inflationary pressure as shown In the graph with actual GDP exceeding the target GEIP. Assn me Marginal Propensity to consume = ?5%. Price 30D 4'00 GDP 1.1 How much should the government tax to remote the inationary pressure? Show you detallecl solutions. Problem 3. Assume the economy is below full employment. The government aims to remove recessionary pressure. How much should the government spend to bring the emnorny to full employment level? Price 20G EDD GDP ll
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