If government spending is increased by £500 and taxes are reduced by £500, equilibrium output will change by

Name: If government spending is increased by £500 and taxes are reduced by £500, equilibrium output will change by
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Question

Quizplus · Accepted Answer

The change in equilibrium output depends on the marginal propensity to consume, the marginal tax rate, and other factors not specified in the question, making it impossible to determine the exact change in output without additional information.

If Government Spending Is Increased by £500 and Taxes Are