Macroeconomics question: In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: A. $20 billion B. $10 billion C. $40.50 billion D. $31.25 billion
Macroeconomics question: In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: A. $20 billion B. $10 billion C. $40.50 billion D. $31.25 billion
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: Six Debates Over Macroeconomic Policy
Section: Chapter Questions
Problem 2QR
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In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real
A. $20 billion
B. $10 billion
C. $40.50 billion
D. $31.25 billion
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