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Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
Edition 6ISBN: 978-1111822354Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
Edition 6ISBN: 978-1111822354 Exercise 1
Calculate the changes in real GDP that would result in each of the following cases (assuming simple multipliers, with no automatic stabilizers or destabilizers):
a. Government purchases rise by $7.5 billion and the MPC is 0.95.
b. Taxes fall by $7.5 billion, and the MPC is 0.95.
a. Government purchases rise by $7.5 billion and the MPC is 0.95.
b. Taxes fall by $7.5 billion, and the MPC is 0.95.
Explanation
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(b)Decrease in the taxes leads to an inc...
Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
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