Calculate the change in real GDP that would result in each of the following cases (assuming an
Question:
Calculate the change in real GDP that would result in each of the following cases (assuming an MPC of 0.8, and simple multipliers, with no automatic stabilizers or destabilizers):
a. Government purchases rise by $30 billion and taxes fall by $30 billion.
b. Government purchases and taxes both rise by $30 billion.
c. Government purchases and taxes both fall by $30 billion.
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Related Book For
Macroeconomics Principles and Applications
ISBN: 978-1111822354
6th edition
Authors: Robert E. Hall, Marc Lieberman
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