If government spending is increased by $500, taxes are reduced by $200, and the MPS is 0.2, equilibrium output will change by?

$1500

Explanation:

The government spending is the amount of money that is spent by the public sector. If government spending increased by $500 and taxes are reduced by $200. Equilibrium level of output is level at which aggregate demand equals to aggregate supply. The equilibrium output will change by $1500.

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