Exhibit 20A-3 Macro AD/AS Model

As shown in Exhibit 20A-3, assume the marginal propensity to consume MPC equals 0.80. Using discretionary fiscal policy, federal government spending should be _________ in order to restore the economy from E ₁ to full employment.

Question

Exhibit 20A-3 Macro AD/AS Model
Exhibit 20A-3 Macro AD/AS Model As shown in Exhibit 20A-3, assume the marginal propensity to consume MPC equals 0.80. Using discretionary fiscal policy, federal government spending should be _________ in order to restore the economy from E <sub> 1 </sub> to full employment. A) increased by $2 trillion B) decreased by $2 trillion C) decreased by $.40 trillion D) increased by $.80 trillion

Exhibit 20A-3 Macro AD/AS Model As shown in Exhibit 20A-3, assume the marginal propensity to consume MPC equals 0.80. Using discretionary fiscal policy, federal government spending should be _________ in order to restore the economy from E <sub> 1 </sub> to full employment. A) increased by $2 trillion B) decreased by $2 trillion C) decreased by $.40 trillion D) increased by $.80 trillion

As shown in Exhibit 20A-3, assume the marginal propensity to consume MPC equals 0.80. Using discretionary fiscal policy, federal government spending should be _________ in order to restore the economy from E ₁ to full employment.

Quizplus · Accepted Answer

The Answer of Exhibit 20A-3 Macro AD/AS Model As shown in Exhibit 20A-3, assume the marginal propensity to consume MPC equals 0.80. Using discretionary fiscal policy, federal government spending should be _________ in order to restore the economy from E ₁ to full employment.