According to the Keynesian cross model if the marginal propensity to consume is 2/3, cut in taxes of 120 Billion increases equilibrium income by  a) 160 Billion  b) 180 Billion  C) 240 Billion  d) 360 Billion

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 17SQ
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According to the Keynesian cross model if the marginal propensity to consume is 2/3, cut in taxes of 120 Billion increases equilibrium income by 

a) 160 Billion 

b) 180 Billion 

C) 240 Billion 

d) 360 Billion

 

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