Assume the economy is in recession, the MPC is 0.80, and an increase in real GDP of $200 billion is needed to reach full employment. The target can be reached if government spending is increased by a. $20 billion. b. $200 billion. c. $80 billion. d. $40 billion.
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Solutions
Assume the economy is in recession, the MPC is 0.80, and an increase in real GDP of $200 billion is needed to reach full employment. The target can be reached if government spending is increased by
- a. $20 billion.
- b. $200 billion.
- c. $80 billion.
- d. $40 billion.
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