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Two identical countries, Country A and Country B, can each be described by a Keynesian-cross model. The MPC is 0.9 in each country. Country A decides to increase spending by $2 billion, while Country B decides to cut taxes by $2 billion. Find the tax and government multiplier for both countries. In which country will the new equilibrium level of income be greater?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91669452

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