Suppose that the MPC is 0.60; there is no investment accelerator; and there are no crowding-out effects. If government expenditures increase by $25 billion, then aggregate demand Answer shifts rightward by $62.5 billion. shifts rightward by $50.0 billion. shifts rightward by $32.5 billion. None of the above is correct.

Suppose that the MPC is 0.60; there is no investment accelerator; and there are no crowding-out effects. If government expenditures increase by $25 billion, then aggregate demand Answer shifts rightward by $62.5 billion. shifts rightward by $50.0 billion. shifts rightward by $32.5 billion. None of the above is correct.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 3SQ

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Similar questions

Suppose the government reduces taxes by $20 billion and that there is no crowding-out effect and the MPC is .75 then the total effect of the tax cut on aggregate demand is a) 50 billion b) 60 billion c) 70 billion d) 80 billion
Suppose that the MPC is 0.60; there is no investment accelerator; and there are no crowding-out effects. If government expenditures increase by $25 billion, then aggregate demand shifts rightward by $62.5 billion. shifts rightward by $50.0 billion. shifts rightward by $32.5 billion. None of the above is correct.
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Suppose that there are no crowding out effects and the MPC is .7. By how much must the government increase expenditures to shift the aggregate demand curve right by $10 billion?
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Suppose there are both multiplier and crowding out effects but without any accelerator effects. An increase in government expenditures would a. always shift aggregate demand right by a smaller amount than the increase in government expenditures. b. always shift aggregate demand right by a larger amount than the increase in government expenditures. c. shift aggregate demand right by a larger, equal, or smaller amount than the increase in government expenditures. d. always shift aggregate demand right by the same amount as the increase in government expenditures.
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