Assume the MPC is 0.80.If the government wants to eliminate an AD shortfall of $300 billion,it should
A) Cut taxes by $75 billion.
B) Cut taxes by $240 billion.
C) Increase taxes by $60 billion.
D) Cut taxes by $60 billion.
Correct Answer:
Verified
Q30: A tax cut
A)Directly decreases the disposable income
Q31: If the MPC equals 0.80,a $200 billion
Q32: The "naïve" Keynesian model is unrealistic because
Q33: A tax cut has a smaller impact
Q34: To eliminate an AD shortfall of $100
Q36: The desired tax cut to close a
Q37: Ceteris paribus,if the AD shortfall equals $600
Q38: The general formula for calculating the desired
Q39: Which of the following explains why the
Q40: Ceteris paribus,if income was transferred from individuals
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