Multiple Choice
To eliminate an AD shortfall of $100 billion when the economy has an MPC of 0.80,the government should increase transfer payments by
A) $25 billion.
B) $100 billion.
C) $80 billion.
D) $20 billion.
Correct Answer:

Verified
Correct Answer:
Verified
Related Questions
Q7: A limitation on fiscal policy is time.Which
Q8: Which of the following would cause the
Q9: Nearly half of the federal government's tax
Q10: The impact of fiscal stimulus on aggregate
Q11: With an upward-sloping AS curve,a decrease in
Q13: Suppose economic conditions call for a tax
Q14: From a Keynesian perspective,the way out of
Q15: Which of the following formulas is used
Q16: A decrease in transfer payments works like
Q17: The statement "balancing the budget on the