Suppose the government is weighing different fiscal policy options, and they would like your help estimating their impact. They are trying to decide whether to decrease transfers to households by $1000 or decrease government purchases of goods and services by $1000. If the marginal propensity to consume is 0.75, what effect with the two policy options have on real GDP? Round your answers to the nearest whole number, enter them as numbers not words, and do not put any other symbols in your answers. Make sure to put a negative sign in your answer to signify any decreases in the variable of interest when appropriate. 3. Change in GDP from $1000 transfer decrease $ 4. Change in GDP from $1000 government spending decrease-
Suppose the government is weighing different fiscal policy options, and they would like your help estimating their impact. They are trying to decide whether to decrease transfers to households by $1000 or decrease government purchases of goods and services by $1000. If the marginal propensity to consume is 0.75, what effect with the two policy options have on real GDP? Round your answers to the nearest whole number, enter them as numbers not words, and do not put any other symbols in your answers. Make sure to put a negative sign in your answer to signify any decreases in the variable of interest when appropriate. 3. Change in GDP from $1000 transfer decrease $ 4. Change in GDP from $1000 government spending decrease-
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 1DQ
Related questions
Question
please help me
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning