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  3. assume the marginal propensity to consume is 0.8.

Assume the marginal propensity to consume is 0.8. To offset a fall in income...

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Accounting

Assume the marginal propensity to consume is 0.8. To offset a fall in income of 1,000 the government should

a.raise taxes by $250.

b.increase government spending and taxes by 1,000.

c.increase taxes by $200.

d.cut taxes by $200.

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