Calculate the change in real GDP that would result in each of the following cases (assuming an

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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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Macroeconomics Principles and Applications

ISBN: 978-1111822354

6th edition

Authors: Robert E. Hall, Marc Lieberman

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