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I would suggest foam. I've used both plywood and foam and on my next layout I'm going with 100% foam. I use foam for my 2nd level and it is lighter, cheaper, and easier to mold. I just bought a sheet of polystyrene that is 1" thich and 4'x8' for $13. Consider that plywood is significantly heavier than foam plus I use tortiose swith machines throughout my 2nd level and the thichness is not an issue. Of course I use the Digitrax Empirer Builder (DCC) to control my locos, switching, and signaling. I found that it is easier to expand a layout with DCC than with DC. In expanding I'm referring to turnout control and switching. Hope this helps.
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