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Suppose the following set of equations define the economy of Macroville. Consumption=C+cYd, Yd=Y-Taxes, Taxes=T+tY, Investment desired=1, Government expenditures=G, Exports=X, Imports=F. Suppose that c=.60 and t=.10
Suppose the following set of equations define the economy of Macroville. Consumption=C"+cYd, Yd=Y-Taxes, Taxes=T"+tY, Investment desired=1", Government expenditures=G", Exports=X", Imports=F". Suppose that c=.60 and t=.10 for Macroville. If Macroville wants to increase Y* by $4,340 with a balanced budget change in T" and G", then they should O A. increase G" and increase T" by $4,988. O B. increase G" and increase T" by $2,000. O C. increase G" and decrease T" by $4,988. O D. increase G" and increase T" by $3,338
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