5. Explain the effects of the following actions on equilibrium income, assuming that the marginal propensity to consume is 0.8 a. Government purchases rise by $40 billion. b. Taxes fall by $40 billion

5. Explain the effects of the following actions on equilibrium income, assuming that the marginal propensity to consume is 0.8 a. Government purchases rise by $40 billion. b. Taxes fall by $40 billion

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 5.10P

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