Exhibit 9-5 Keynesian aggregate-expenditures model where the MPC is 0.75 To eliminate the GDP gap shown in Exhibit 9-5, the government should cut its spending by:
A)$0.5 trillion.
B)$1 trillion.
C)$1.5 trillion.
D)$2 trillion.

Question

Exhibit 9-5 Keynesian aggregate-expenditures model where the MPC is 0.75  To eliminate the GDP gap shown in Exhibit 9-5, the government should cut its spending by:
A)$0.5 trillion. 
B)$1 trillion. 
C)$1.5 trillion. 
D)$2 trillion.

Quizplus · Accepted Answer

The Answer of Exhibit 9-5 Keynesian aggregate-expenditures model where the MPC is 0.75  To eliminate the GDP gap shown in Exhibit 9-5, the government should cut its spending by:
A)$0.5 trillion. 
B)$1 trillion. 
C)$1.5 trillion. 
D)$2 trillion.

Exhibit 9-5 Keynesian Aggregate-Expenditures Model Where the MPC Is 0