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Assume that Equilibrium GDP is £4,000 billion. Potential GDP is £5,000 billion. The marginal propensity to consume is 4/5 (0.8). By how much and in what direction should government purchases be changed? O increase by £1,000 billion O decrease by £1,000 billion O increase by £100 billion O increase by £200 billion

Assume that Equilibrium GDP is £4,000 billion. Potential GDP is £5,000 billion. The marginal propensity to consume is 4/5 (0.8). By how much and in what direction should government purchases be changed? O increase by £1,000 billion O decrease by £1,000 billion O increase by £100 billion O increase by £200 billion

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A Moving to another question will save this response. « < Question 18 of 25 Question 18 Assume that Equilibrium GDP is £4,000 billion. Potential GDP is £5,000 billion. The marginal propensity to consume is 4/5 (0.8). By how much and in what direction should government purchases be changed? O increase by £1,000 billion O decrease by £1,000 billion O increase by £100 billion O increase by £200 billion A Moving to another question will save this response. « < Question 18 of 25 > MacBook Air 80 888 F10 F11 F8 F9 F7 F5 F6 F2 F3 F4 * %23 $ % & 7 8 * 00
Transcribed Image Text:A Moving to another question will save this response. « < Question 18 of 25 Question 18 Assume that Equilibrium GDP is £4,000 billion. Potential GDP is £5,000 billion. The marginal propensity to consume is 4/5 (0.8). By how much and in what direction should government purchases be changed? O increase by £1,000 billion O decrease by £1,000 billion O increase by £100 billion O increase by £200 billion A Moving to another question will save this response. « < Question 18 of 25 > MacBook Air 80 888 F10 F11 F8 F9 F7 F5 F6 F2 F3 F4 * %23 $ % & 7 8 * 00
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