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OpenStudy (anonymous):
Ok, so I have these questions for my Macroeconomics class, and I have the answers, but I don't understand how to get them, like the steps to solve them. 1. Assume that MPC is 0.8 and potential output is $800 billion. If current real GDP is $700 billion, which of the following policies would being the economy to potential output? Ans: Increase government spending by $20 billion.
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