Assume the MPC is 0.80, if the government engages in expansionary fiscal policy and spends $4,000,000 how much does national income increase?

If the MPC equals 0.60, how much money does the government need to spend to close the recessionary gap? (graph is for this part)

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Price Level PL* LRAS SRAS X AD Y*=$400 Yp=$8000 GDP or NI Price Level PL* LRAS SRAS X AD Y*=$400 Yp=$8000 GDP or NI Price Level PL* LRAS SRAS X AD Y*=$400 Yp=$8000 GDP or NI

Answer rating: 100% (QA)

The graph shows the shortrun aggregate supply SRAS curve the longrun aggregate supply LRAS curve and the aggregate demand AD curve The SRAS curve is t... View the full answer