During the 1930s the U.S. entered the Great Depression. During the Great depression investment fell from a yearly rate of $16.7 billion to $1.7 billion. In 1932, President Hoover increased income taxes. Assume the MPC is .92 C). If the AD shortfall in 1934 was $300 billion, what change in government expenditures on goods and services (G) would you have recommended to
During the 1930s the U.S. entered the Great Depression. During the Great depression investment fell from a yearly rate of $16.7 billion to $1.7 billion. In 1932, President Hoover increased income taxes. Assume the MPC is .92 C). If the AD shortfall in 1934 was $300 billion, what change in government expenditures on goods and services (G) would you have recommended to
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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During the 1930s the U.S. entered the Great Depression. During the Great depression investment fell from a yearly rate of $16.7 billion to $1.7 billion. In 1932, President Hoover increased income taxes. Assume the MPC is .92
C). If the AD shortfall in 1934 was $300 billion, what change in government expenditures on goods and services (G) would you have recommended to restore full-employment?
D). If the AD shortfall in 1934 was $300 billion, what change in income/transfer payments would you have recommended ?
E). If the AD shortfall in 1934 was $300 billion, what change in income taxes would you have recommended ?
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