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For a specific model (with no Net Exports) where the Consumption function is given as C...

For a specific model (with no Net Exports) where the Consumption function is given as C = 150 + 0.75YD I = 120 G = 500 Tax rate = 20% calculate the equilibrium level of income showing all your calculations; calculate the multiplier in (a) case showing all your calculations; suppose Tax rate increases to 25%. What is the equilibrium income now? The new multiplier? Show all your calculations. explain why the multiplier numerical value must be greater than 1.

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