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    Government cuts its purchases

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    Assume the government cuts its purchases by $120 billion. As a result, the budget deficit is reduced by $40 billion, private domestic decreases by $10 billion, disposable personal income decrease by $80 billion and the trade deficit is reduced by $15 billion. By how much has national income (y) changed?

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    https://brainmass.com/economics/macroeconomics/government-cuts-purchases-254182

    Solution Summary

    National income is calculated.

    $2.19