1.4. The deflationary gap in an economy is calculated to be $700 billion. The marginal propensity to save (MPS) is 0.1 The marginal propensity to import is (MPM) 0.15 The marginal rate of taxation is (MPT) 0.1. By how much would the government need change its spending on goods and services to eliminate the deflationary gap?
1.4. The deflationary gap in an economy is calculated to be $700 billion. The marginal propensity to save (MPS) is 0.1 The marginal propensity to import is (MPM) 0.15 The marginal rate of taxation is (MPT) 0.1. By how much would the government need change its spending on goods and services to eliminate the deflationary gap?
Chapter11: Fiscal Policy
Section: Chapter Questions
Problem 1.7P
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1.4. The deflationary gap in an economy is calculated to be $700 billion. The marginal propensity to save (MPS) is 0.1
The marginal propensity to import is (MPM) 0.15
The marginal rate of
By how much would the government need change its spending on goods and services to eliminate the deflationary gap?
1.5. How does CHANGE in PRICES effect your lives?
1.6. Explain why INFLATION usually accelerates during wartime?
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