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Assume in a private closed economy that the equilibrium level of income is $380 and the MPS is 0. Now suppose government collects taxes of $50 and...

Assume in a private closed economy that the equilibrium level of income is $380 and the MPS is 0.25. Now suppose government collects taxes of $50 and spends the entire amount. As a result:
A)
the equilibrium level of real income and the price level will both remain unchanged.
B)
nominal wage rates will fall.
C)
the equilibrium level of income will rise to $420.
D)
the equilibrium level of income will rise to $430.

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