Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government aims to increase GDP by $250 billion. a) Calculate the fiscal multiplier b) how much the government needs to increase spending to increase GDP by $250 billion
Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government aims to increase GDP by $250 billion. a) Calculate the fiscal multiplier b) how much the government needs to increase spending to increase GDP by $250 billion
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 13SQ
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Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government aims to increase
a) Calculate the fiscal multiplier
b) how much the government needs to increase spending to increase GDP by $250 billion
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