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Suppose that the German taxes and real imports do not depend on German real disposable income....

Suppose that the German taxes and real imports do not depend on German real disposable income. Autonomous real consumption is €500 billion, investment spending is €250 billion, lump-sum taxes (taxes that do not depend on real income) is €100 billion, German government spending is €100 billion, real net exports are €0 billion, and the German Marginal Propensity to Consume is 0.5. What is the value of the equilibrium German real GDP, Y*? €1,600 billion. €1,000 billion. €800 billion. €850 billion.

Macroeconomics

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