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      Question

      Consider a closed economy wherein C = 0.8 Yd  

      , t = 0.25 , I = 900 – 50i , G = 800, L = 0.25 Y – 62.5i , M/P = 500 Where in Yd = Disposable Income, t is the tax rate, i is the interest rate, G is the government spending. Calculate the Fiscal Policy Multiplier for the above question
      A 2.5 Correct Answer Incorrect Answer
      B 1.5 Correct Answer Incorrect Answer
      C 1.67 Correct Answer Incorrect Answer
      D 1.33 Correct Answer Incorrect Answer

      Solution

       

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