Question: C = 300 + .8Yd G = 400 T = 200 I = 200 If government spending is increased by $500 and taxes are reduced

C= 300 + .8Yd

G= 400

T= 200

I= 200

If government spending is increased by $500 and taxes are reduced by $200, and theMPSis 0.2, overall equilibrium output will increase by

a.

1,500

b.

1,700

c.

3,300

d.

3,500

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