1) Suppose economists observe that a $10B increase in government spending raises aggregate demand in the economy...
Fantastic news! We've Found the answer you've been seeking!
Question:
1) Suppose economists observe that a $10B increase in government spending raises aggregate demand in the economy by $30B. If this country does not trade and there is no crowding out of private sector spending, what would MPC be equal to?
2) Do you agree or disagree with the following statement? Explain your answer
“An increase in government purchases (G) is usually a more effective policy than an increase in transfer payments when the goal is to eliminate a recessionary gap.”
Related Book For
Posted Date: