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Question 06: Assume the marginal propensity to consume is 0.80 for typical consumers in our pretend economy, and that there is an initial round of

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Question 06: Assume the marginal propensity to consume is 0.80 for typical consumers in our pretend economy, and that there is an initial round of new spending of $500. It doesn't matter whether consumers, business, or government started this new spending, just that it is $500. How much, in theory, will this new spending increase the economy - that is what is the change in real GDP? You can try to calculate this on your own, and then confirm with the spreadsheet by changing cells G1 and G4. You can round the spreadsheet

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