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-

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Chapter11: Managing Aggregate Demand: Fiscal Policy
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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 $
%3D
Transcribed Image Text: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 $ %3D
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