Problem
Suppose that the government plan to have a tax cut of Euro 10 billion for people earning between 20,000 - 40,000, who represent 80% of the population and have a marginal propensity to consume of 075. Moreover, the government plans tax cuts for Euro 5 billion for people earning above 40,000 Euro who are 10% of the population. If the initial GDP is of 200 billion, after this operation what do you expect the GDP to be?