Question: Hamsterville, where the marginal propensity to save is equal to [0.25], is currently experiencing a negative output gap of [$60] million. How much would Hamsterville's
Hamsterville, where the marginal propensity to save is equal to \[0.25\], is currently experiencing a negative output gap of \[\$60\] million. How much would Hamsterville's government have to change taxes to restore the full employment level of aggregate output? Choose 1 answer: Choose 1 answer: (Choice A) Taxes should be increased by \[\$60\] million A Taxes should be increased by \[\$60\] million (Choice B) Taxes should be reduced by \[\$20\] million B Taxes should be reduced by \[\$20\] million (Choice C) Taxes should be increased by \[\$15\] million C Taxes should be increased by \[\$15\] million (Choice D) Taxes should be reduced by \[\$10\] million D Taxes should be reduced by \[\$10\] million (Choice E) Taxes should be reduced by \[\$5\] million E Taxes should be reduced by \[\$5\] million
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