n Paynia the marginal propensity to consume is .6. Times are tough and the economy is operating on the flat ("Keynesian") range of the Aggregate Supply Curve. If Congress wished to increase Aggregate Demand by $500 B, how much would it need to raise Government Spending, all else constant?
n Paynia the marginal propensity to consume is .6. Times are tough and the economy is operating on the flat ("Keynesian") range of the Aggregate Supply Curve. If Congress wished to increase Aggregate Demand by $500 B, how much would it need to raise Government Spending, all else constant?
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 6SQ
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In Paynia the marginal propensity to consume is .6. Times are tough and the economy is operating on the flat ("Keynesian") range of the
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