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2. a. Assuming with an increase in the autonomous government expenditure of $100m, calculate the change in real GDP if MPC is 0.5. b. What happens to…
2. a. Assuming with an increase in the autonomous government expenditure of $100m, calculate the change in real GDP if MPC is 0.5. b. What happens to the real GDP if MPC increases to 0.75 and 0.9? c. What implications can you derive on the multiplier and the change in real GDP as the MPC rises?
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