If the AD shortfall is $300 billion and the MPC is 0.95, Instructions: Round your responses to one decimal place. a. how large is the desired fiscal stimulus? S 15 billion b. how large an income tax cut is needed? $ billion c. alternatively, how much more government spending would achieve the target? 15 billion
If the AD shortfall is $300 billion and the MPC is 0.95, Instructions: Round your responses to one decimal place. a. how large is the desired fiscal stimulus? S 15 billion b. how large an income tax cut is needed? $ billion c. alternatively, how much more government spending would achieve the target? 15 billion
Chapter1: Making Economics Decisions
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Problem 11-04 (Algo)
If the AD shortfall is $300 billion and the MPC is 0.95,
Instructions: Round your responses to one decimal place.
a. how large is the desired fiscal stimulus?
$
15 billion
b. how large an income tax cut is needed?
billion
c. alternatively, how much more government spending would achieve the target?
15 billion](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F278b4f1b-dc4a-4847-aa3b-4daf85fac5aa%2Ffce70504-30f8-4e46-9070-9c96e0b66927%2Fuxvdrsu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Itranscript
Problem 11-04 (Algo)
If the AD shortfall is $300 billion and the MPC is 0.95,
Instructions: Round your responses to one decimal place.
a. how large is the desired fiscal stimulus?
$
15 billion
b. how large an income tax cut is needed?
billion
c. alternatively, how much more government spending would achieve the target?
15 billion
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