Suppose that the government increases its spending by 50$. If the MPC (marginal propensity to consume) in the economy is 0.5, then according to the Keynesian cross output will a. Increase by 70$ b. Decrease by 100$ c. Increase by 100$ d. Not change

Suppose that the government increases its spending by 50$. If the MPC (marginal propensity to consume) in the economy is 0.5, then according to the Keynesian cross output will a. Increase by 70$ b. Decrease by 100$ c. Increase by 100$ d. Not change

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 15E

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Question

Suppose that the government increases its
spending by 50$. If the MPC (marginal
propensity to consume) in the economy is 0.5,
then according to the Keynesian cross output
will a. Increase by 70$ b. Decrease by 100 c.
Increase by 100$ d. Not change

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