
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- a) If the spending multiplier is 2.0 and the economy is in a $540 billion contractionary gap, how much should I increase government purchases to eliminate the gap?
b) Continuing with a, if the MPC is 0.9, how much would I need to increase transfer payments to eliminate the $500 billion contractionary gap?
c) Distinguish between deficit and debt.
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