Assume that a hypothetical economy with an MPC of 0.8 is experiencing severe recession Instructions: In part a round your answers to 2 decimal places Enter your answers as positive numbers in part & enter your answers as whole numbers. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by 50 10.00 bilion How large a tax cut would be needed to achieve the same increase in aggregate demand? 13 bilion
Assume that a hypothetical economy with an MPC of 0.8 is experiencing severe recession Instructions: In part a round your answers to 2 decimal places Enter your answers as positive numbers in part & enter your answers as whole numbers. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by 50 10.00 bilion How large a tax cut would be needed to achieve the same increase in aggregate demand? 13 bilion
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 2TY
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