In the model where G = qT, when q increases, government spending, if chosen optimally, should

Name: In the model where G = qT, when q increases, government spending, if chosen optimally, should
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Quizplus · Accepted Answer

In the G = qT model, q represents the marginal propensity to spend by the government. As q increases, it implies that the government is more willing to spend a larger proportion of additional income. Therefore, if chosen optimally, government spending should increase in response to an increase in q.

In the Model Where G = QT, When Q Increases