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C = 50 + 0.80Yd; C = consumption function; Yd = disposable income (Y-T) T =...

C = 50 + 0.80Yd; C = consumption function; Yd = disposable income (Y-T)

T = 30; T = Tax revenue I = 100;

I = Investment G = 150;

G = Government expenditure

Yf = Full Employment RGDP (Potential RGDP) = 1600

14. Using the value of MPC = 0.75, and knowing the difference between the values of expenditure multiplier and the tax multiplier, with reduction of taxes by $300 billion (other things staying the same), estimate increased level equilibrium aggregate output (RGDP). You need to show your work of estimations.

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