Recall that the Keynesian spending multiplier equals 1/ (1 - MPC). Suppose that in panel (b) of

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Recall that the Keynesian spending multiplier equals 1/ (1 - MPC). Suppose that in panel (b) of Figure 13-1, the government knows that the MPC is equal to 0.75 and that the amount of the horizontal distance that the AD curve had to be shifted directly leftward from point E1 was equal to $1.0 trillion. What is the reduction in real government spending required to have generated this shift?
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