The equilibrium level of real GDP is Rs 1,000 billion, the full employment level of real GDP is Rs 1,250 billion, and the marginal propensity to consume (MPC) is 0.60. How much government spending ("G) would be needed to raise income to full- employment level?
The equilibrium level of real GDP is Rs 1,000 billion, the full employment level of real GDP is Rs 1,250 billion, and the marginal propensity to consume (MPC) is 0.60. How much government spending ("G) would be needed to raise income to full- employment level?
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 17SQ
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