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8 May, 09:51

Suppose the government in this economy decides to increase government purchases by $400 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to

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  1. 8 May, 10:11
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    The answer is 240 billion dollars.

    Explanation:

    The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to $240 billion.
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