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Questions number 6 to 10 are based on having an MPC equal to 0.8 and potential output is P800 billion. Question #6. The government spending multiplier is: * а. 0.8 b. 1.25 с. 5 O d. 4 7. If the current real GDP is P700 billion: O a. there is an inflationary gap b. there is a recessionary gap c. the economy is in long-run equilibrium d. government transfers should be decreased.

Questions number 6 to 10 are based on having an MPC equal to 0.8 and potential output is P800 billion. Question #6. The government spending multiplier is: * а. 0.8 b. 1.25 с. 5 O d. 4 7. If the current real GDP is P700 billion: O a. there is an inflationary gap b. there is a recessionary gap c. the economy is in long-run equilibrium d. government transfers should be decreased.

MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
10th Edition
ISBN:9781337613057
Author:Tucker
Publisher:Tucker
Chapter9: The Keynesian Model In Action
Section: Chapter Questions
Problem 13SQ
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Please answer the question:                                                                              * the attached photo is for you to see that it is connected to the question *

If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? 

a. decrease taxes by P100 billion
b. increase taxes by P100 billion
c. decrease taxes by P25 billion
d. increase taxes by P25 billion
Questions number 6 to 10 are based on having an MPC equal to 0.8 and potential output is P800 billion. Question #6. The government spending multiplier is: * a. 0.8 b. 1.25 c. 5 d. 4 7. If the current real GDP is P700 billion: * a. there is an inflationary gap b. there is a recessionary gap c. the economy is in long-run equilibrium d. government transfers should be decreased.
Transcribed Image Text:Questions number 6 to 10 are based on having an MPC equal to 0.8 and potential output is P800 billion. Question #6. The government spending multiplier is: * a. 0.8 b. 1.25 c. 5 d. 4 7. If the current real GDP is P700 billion: * a. there is an inflationary gap b. there is a recessionary gap c. the economy is in long-run equilibrium d. government transfers should be decreased.
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