Essay
Suppose that the marginal propensity to consume is 0.75.
a. If the government decreases spending by $500 billion,what is the change in output?
b. If the government decreases taxes by $500 billion,what is the change in output?
c. If the government decreases spending by $500 billion and at the same time decreases taxes by $500 billion,what is the change in output?
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If the MPC = 0.75,the autonomous expendi...View Answer
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