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Consider a hypothetical economy where there are no taxes and no international trade. Households spend $0.90 of each additional dollar they earn and save the remaining $0.10. If there are no taxes and no international trade, the oversimplified multiplier for this economy is . Suppose investment spending in this economy decreases by $200 billion. The decrease in investment will lead to a decrease in income, generating a
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Consider a hypothetical economy where there are no taxes and no international trade. Households spen...
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