Suppose the economy is in a recession. The economy needs to expand by at least $300 billion, and the marginal propensity to consume is 0.7. What is the least amount the government can spend to overcome the $300 billion gap? billion

Suppose the economy is in a recession. The economy needs to expand by at least $300 billion, and the marginal propensity to consume is 0.7. What is the least amount the government can spend to overcome the $300 billion gap? billion

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 7SQ

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Suppose the economy is in a recession. The economy needs to expand by at least $300 billion, and
the marginal propensity to consume is 0.7.
What is the least amount the government can spend to overcome the $300 billion gap?
$
billion

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