onsider a simple Keynesian model with taxation. Suppose the marginal rate of tax is 0.2 and the marginal propensity to consume is 0.5. Then a decrease in investment expenditure of 100 units will: Group of answer choices None of the other options Increase equilibrium output by approximately 150 units Increase equilibrium output by approximately 167 units Decrease equilibrium output by approximately 150 units
onsider a simple Keynesian model with taxation. Suppose the marginal rate of tax is 0.2 and the marginal propensity to consume is 0.5. Then a decrease in investment expenditure of 100 units will: Group of answer choices None of the other options Increase equilibrium output by approximately 150 units Increase equilibrium output by approximately 167 units Decrease equilibrium output by approximately 150 units
Chapter21: Fiscal Policy
Section: Chapter Questions
Problem 4SQ
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Consider a simple Keynesian model with
Group of answer choices
None of the other options
Increase equilibrium output by approximately 150 units
Increase equilibrium output by approximately 167 units
Decrease equilibrium output by approximately 150 units
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