Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? Select one or more: a. Public spending, G, increases by 200 b. real GDP was larger than nominal GDP from 2002 to 2008 Public spending, G, increases by 150 c. Investment, I, increases by 150 d. Taxes, T, decrease by 200
Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? Select one or more: a. Public spending, G, increases by 200 b. real GDP was larger than nominal GDP from 2002 to 2008 Public spending, G, increases by 150 c. Investment, I, increases by 150 d. Taxes, T, decrease by 200
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 11SQ
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Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output?
Select one or more:
a. Public spending, G, increases by 200
b. real
c. Investment, I, increases by 150
d. Taxes, T, decrease by 200
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