Suppose the MPC = 0.8 and the government increases spending by P100 billion, financing this spending with a P100 billion tax increase. Which of the following will be the likely effect of this action? a. Real GDP will expand by P100 billion
Suppose the MPC = 0.8 and the government increases spending by P100 billion, financing this spending with a P100 billion tax increase. Which of the following will be the likely effect of this action? a. Real GDP will expand by P100 billion
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 13SQ
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Suppose the MPC = 0.8 and the government increases spending by P100 billion, financing this spending with a P100 billion tax increase. Which of the following will be the likely effect of this action?
a. Real GDP will expand by P100 billion
b. Real GDP will contract by P100 billion
c. Real GDP will expand by P500 billion
d. Real GDP will expand by P400 billion
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