If government spending and taxes both change by the same amount, how much must they change to

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If government spending and taxes both change by the same amount, how much must they change to eliminate the recessionary gap?

Assume that equilibrium real GDP is $800 billion, potential real GDP is $900 billion, the MPC is .80, and the MPI is .40.

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Economics

ISBN: 9781032046723

9th Edition

Authors: William Boyes, Michael Melvin

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Question Posted: Apr 23, 2024 02:01 AM

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If government spending and taxes both change by the same amount, how much must they change to

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The formula for calculating the size of a recessionary gap is Recessionary gap Potential real GDP Eq...View the full answer

Economics

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