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Econ 4th Edition by William McEachern
Edition 4ISBN: 978-1285423548Econ 4th Edition by William McEachern
Edition 4ISBN: 978-1285423548 Exercise 2
CHANGES IN GOVERNMENT PURCHASES Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for each of the following values of the MPC. Then, calculate the change if the government, instead of reducing its purchases, increased autonomous net taxes by $10 billion.
a. 0.9
b. 0.8
c. 0.75
d. 0.6
a. 0.9
b. 0.8
c. 0.75
d. 0.6
Explanation
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Verified
Multiplier effect of consumption on real...
Econ 4th Edition by William McEachern
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