Answered: If the MPC in an economy is 0.80,…

If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $80 billion by cutting taxes by

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $80 billion by cutting taxes by

$100 billion.
$80 billion.
$20 billion.
$64 billion.

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