If MPC = .5, a simultaneous increase in both taxes and worthless government spending of $20 will: decrease GDP by $20. decrease GDP by $40. increase GDP by $20. increase GDP by $40. Increase GDP by $60.

If MPC = .5, a simultaneous increase in both taxes and worthless government spending of $20 will: decrease GDP by $20. decrease GDP by $40. increase GDP by $20. increase GDP by $40. Increase GDP by $60.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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If MPC = .5, a simultaneous increase in both taxes and worthless government spending of $20 will:

		decrease GDP by $20.
		decrease GDP by $40.
		increase GDP by $20.
		increase GDP by $40.
		Increase GDP by $60.

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