Assume the economy is in a recession and real GDP is below its potential level of output. The MPC is .75, and the government increases spending by $100billion. How much will aggregate expenditures rise? A) $100 billion B) $75billion C) $400billion D)$133 billion
Assume the economy is in a recession and real GDP is below its potential level of output. The MPC is .75, and the government increases spending by $100billion. How much will aggregate expenditures rise? A) $100 billion B) $75billion C) $400billion D)$133 billion
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 13SQ
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QUESTION 40
Assume the economy is in a recession and real
A) $100 billion
B) $75billion
C) $400billion
D)$133 billion
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