An economy has a fixed price level, no imports, and no income taxes. An increase in autonomous
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An economy has a fixed price level, no imports, and no income taxes. An increase in autonomous expenditure of $200 billion increases equilibrium expenditure by $800 billion. Calculate the multiplier and explain what happens to the multiplier if an income tax is introduced.
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Solution The multiplier M 17 in this example and what happ...View the full answer
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Related Book For
Microeconomics Canada In The Global Environment
ISBN: 9780321931184
9th Edition
Authors: Robin Bade, Michael Parkin
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