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April 16, 2014

Homework Help: economics

Posted by Tina on Saturday, July 9, 2011 at 11:19am.

Suppose that Congress enacts a lump-sum tax cut of $750 billion. The marginal propensity to consume is equal to .075. Assuming that Ricardian equivalence holds true, what is the effect on equilibrium real GDP? On saving?

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