Suppose the government raises taxes by 100 billion assume


Suppose the government raises taxes by $100 billion. Assume that the marginal propensity to consume out new income is 0.8(i.e if a person receives $100, he will spend $80 and save $20). Consider what happens to the following, how much do they rise or fall by:

1) public savings

2) private savings

3) investment

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Basic Computer Science: Suppose the government raises taxes by 100 billion assume
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