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The economy is in recession: real GDP is $5 billion.Real GDP is $1 billion short of the natural level of GDP.The government wants to move
The economy is in recession: real GDP is $5 billion.Real GDP is $1 billion short of the natural level of GDP.The government wants to move the economy to its natural level of GDP using fiscal policy.The marginal propensity to consume is and you can assume there is no crowding out.How much additional government spending is required to move the economy to the natural level?
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