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You are provided with the information give below. Y = National income T = Taxes =...

  1. You are provided with the information give below.

Y = National income

T = Taxes = 0.3Y

C = Consumption = 200 + 0.9 (Y – T)

I = Investment = 600

G = Government spending = 1,000

X = Exports = 600

Y = Imports = 0.1 (Y – T)

  1. Determine the government spending multiplier.
  2. Assume that the full employment level of output is 6,000. What level of government spending would be necessary to reach that level? Explain
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