I need help to complete below homework: Q-3) Consider a closed classical economy where the government increases taxes by $800million. If the marginal propensity to consume is 0.75, describe what happens to thefollowing. Please be sure to indicate the magnitude of any change . (a) Public saving (b) Private saving (c) National saving (d) Investment

I need help to complete below homework: Q-3) Consider a closed classical economy where the government increases taxes by $800million. If the marginal propensity to consume is 0.75, describe what happens to thefollowing. Please be sure to indicate the magnitude of any change . (a) Public saving (b) Private saving (c) National saving (d) Investment

MACROECONOMICS

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ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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Question

I need help to complete below homework:

Q-3) Consider a closed classical economy where the government increases taxes by $800million. If the marginal propensity to consume is 0.75, describe what happens to thefollowing. Please be sure to indicate the magnitude of any change .

(a) Public saving

(b) Private saving

(d) Investment

Definition Definition Income earned by a government that is not spent on current expenses, but rather saved for future investments or to pay off debts. It is the difference between government revenue and expenditures, and can be positive or negative.

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