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Refer to the following data. If Year 1 is the first year of this nation's existence and Year 5 is the present year, calculate the
Refer to the following data. If Year 1 is the first year of this nation's existence and Year 5 is the present year, calculate the following:
Government spendingTax revenuesGDP
Year 1$450$425$2,000
Year 25004503,000
Year 36006504,000
Year 46406205,000
Year 56805804,800
If the MPC is 0.80 and full employment GDP for Year 5 is $5,000, then how much of a tax reduction is required to eliminate the GDP gap?
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