Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import equals
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Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import equals 0.07. The economy's real GDP is currently $5,454 billion while its potential real GDP is $6,000 billion. GIven no change in the aggregate price level, what change in government spending on goods and services would bring the economy to full employment real GDP?
Related Book For
Mathematical Applications for the Management Life and Social Sciences
ISBN: 978-1305108042
11th edition
Authors: Ronald J. Harshbarger, James J. Reynolds
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