Answered: If the AD excess is $400 billion and…

If the AD excess is $400 billion and the MPC is 0.9, a) How much fiscal restraint is desired? b) By how much do income taxes have to be increased to get that restraint?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter18: Debates In Macroeconomics Over The Role And Effects Of Government

Section: Chapter Questions

Problem 5QP

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If the AD excess is $400 billion and the MPC is 0.9,
a) How much fiscal restraint is desired?
b) By how much do income taxes have to be increased to get that restraint?

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