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Suppose the marginal propensity to consume is 0.5. If the government decreased spending on goods and services (G) by $100m, all else equal, how would
Suppose the marginal propensity to consume is 0.5. If the government decreased spending on goods and services (G) by $100m, all else equal, how would that affect output? Briefly explain why (i.e., explain the multiplier effect).
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