In the basic Keynesian model where the marginal propensity to consume is 0.5,taxes must be ________,to close an expansionary gap resulting from a $1 billion increase in autonomous consumption.

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In the Keynesian model, the multiplier is 1/(1-MPC). With MPC of 0.5, the multiplier is 2. To offset a $1 billion increase in consumption, taxes must increase by $2 billion to reduce aggregate demand by $1 billion.

In the Basic Keynesian Model Where the Marginal Propensity to Consume