The government wants to reach a new income level based on Keynesian cross, The government calculates that the current investment is 400, and government expenditure needs to increase by 2000, and the consumption function is given by C = 400+ MPC (Y-T). In this case, government purchases multiplier is 2. Government purchases and taxes are the same, both are 200. Please find the current Equilibrium income and new income level

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Given information Current Investment I 400 Increase in Government Expenditure G 2000 G planned to increase from a level but the current level is not g... View the full answer