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Suppose the MPC equals 0.5 and the tax rate is 0.1 for an economy. Holding everything else constant, when government spending increases by $10 billion,
Suppose the MPC equals 0.5 and the tax rate is 0.1 for an economy. Holding everything else constant, when government spending increases by $10 billion, what is the total change in aggregate output?
Select one:
a.
$10 billion
b.$10.5 billion
c.
$20 billion
d.$18.2 billion
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