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Business, 24.10.2020 22:00 indya2

If real GDP is $400 billion, full employment GDP is $800 billion, and the marginal propensity to consume is 0.5, then Congress should a. decrease taxes by $200 billion.

b. increase taxes by $400 billion.

c. increase purchases by an amount slightly more than $200 billion.

d. increase purchases by $200 billion.

e. increase purchases by $400 billion.
Please explain! Not sure how to do this type of problem!

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