Assume there is a recessionary gap of $200 billion, and that the government has decided to engage in expansionary fiscal policy to eliminate this recessionary gap. How much must the government spend to get the economy to the long-run equilibrium if the marginal propensity to consume is 0.57 $25 billion

Assume there is a recessionary gap of $200 billion, and that the government has decided to engage in expansionary fiscal policy to eliminate this recessionary gap. How much must the government spend to get the economy to the long-run equilibrium if the marginal propensity to consume is 0.57 $25 billion

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 6P

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