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Economics for Today 9th Edition by Irvin Tucker
Edition 9ISBN: 978-1305507111Economics for Today 9th Edition by Irvin Tucker
Edition 9ISBN: 978-1305507111 Exercise 46
Key Concept: Fiscal policy
If no fiscal policy changes are implemented to fight inflation, suppose the aggregate demand curve will exceed the current aggregate demand curve by $900 billion at any level of prices. Assuming the marginal propensity to consume is 0.90, this increase in aggregate demand could be prevented by
A) increasing government spending by $500 billion.
B) increasing government spending by $140 billion.
C) decreasing taxes by $40 billion.
D) increasing taxes by $100 billion.
Causation Chain Game
Using Fiscal Policy to Combat Inflation-Exhibit 6
If no fiscal policy changes are implemented to fight inflation, suppose the aggregate demand curve will exceed the current aggregate demand curve by $900 billion at any level of prices. Assuming the marginal propensity to consume is 0.90, this increase in aggregate demand could be prevented by
A) increasing government spending by $500 billion.
B) increasing government spending by $140 billion.
C) decreasing taxes by $40 billion.
D) increasing taxes by $100 billion.
Causation Chain Game
Using Fiscal Policy to Combat Inflation-Exhibit 6
Explanation
Verified
Verified
= 1-10
= -9
The following equa...
Economics for Today 9th Edition by Irvin Tucker
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