For the economy described in Problems 3 and 4, take as given that the multiplier for this

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For the economy described in Problems 3 and 4, take as given that the multiplier for this economy is 2.5. Find the effect on short-run equilibrium output of (L04)
a. An increase in government purchases from 1,500 to 1,600.
b. A decrease in tax collections from 1,500 to 1,400 (leaving government purchases at their original value).
c. A decrease in planned investment spending from 900 to 800.
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Principles of Economics

ISBN: 978-0073511405

5th edition

Authors: Robert Frank, Ben Bernanke

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