Solved

The MPC Is 2/3

Question 61

Multiple Choice

The MPC is 2/3. Real GDP is $500 billion. The natural rate of real GDP is $800 billion. Policymakers choose to follow the aggregate expenditures model to design a tax policy to move the economy to full employment. Taxes should be:


A) decreased by $150 billion.
B) decreased by $100 billion.
C) increased by $150 billion.
D) increased by $100 billion.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions