Suppose economists observe that an increase in government spending of $10 billion raises the total demand for goods and services by $30 billion. If these economists ignore the possibility of crowding out, what would they estimate the marginal
Suppose economists observe that an increase in government spending of $10 billion raises the total demand for goods and services by $30 billion. If these economists ignore the possibility of crowding out, what would they estimate the marginal
Chapter11: Fiscal Policy
Section: Chapter Questions
Problem 5SQP
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Suppose economists observe that an increase in government spending of $10 billion raises the total demand for goods and services by $30 billion.
If these economists ignore the possibility of crowding out, what would they estimate the marginal propensity to consume (MPC) to be?
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