Price level(CPT)11010510095ASFulemployment,50 151Real GDPAD₁(trillions of dollars per year)Suppose the economy in Exhibit 11-2 is in equilibrium at point E, and the marginal propensity to consume (MPC) is 0.75. FollowingKeynesian economics, the federal government can move the economy to full employment at point E₂ by:A increasing government tax revenue by approximately $33 billion.B decreasing government tax revenue by $100 billion.increasing government tax revenue by $100 billion.decreasing government tax revenue by $750 billion.decreasing government tax revenue by approximately $33 billion.

The given issue is a practice in macroeconomics, explicitly in the Keynesian economic framework. The…

110 Price level 105 (CPT) 100 96 y. AS Ful employment 50 151 Real GDP AD AD₁ (trillions of dollars per year) Suppose the economy in Exhibit 11-2 is in equilibrium at point E, and the marginal propensity to consume (MPC) is 0.75. Following Keynesian economics, the federal government can move the economy to full employment at point E₂ by: increasing government tax revenue by approximately $33 billion. B decreasing government tax revenue by $100 billion. increasing government tax revenue by $100 billion. decreasing government tax revenue by $750 billion. decreasing government tax revenue by approximately $33 billion.

110 Price level 105 (CPT) 100 96 y. AS Ful employment 50 151 Real GDP AD AD₁ (trillions of dollars per year) Suppose the economy in Exhibit 11-2 is in equilibrium at point E, and the marginal propensity to consume (MPC) is 0.75. Following Keynesian economics, the federal government can move the economy to full employment at point E₂ by: increasing government tax revenue by approximately $33 billion. B decreasing government tax revenue by $100 billion. increasing government tax revenue by $100 billion. decreasing government tax revenue by $750 billion. decreasing government tax revenue by approximately $33 billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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