Narrbegin Exhibit 17.3 
-According to Exhibit 17.3, if we assume the MPC is 0.9, then a shift in the AD curve from AD0 to AD1 would require an increase in government spending of:
A) $50 billion.
B) $10 billion.
C) $5 billion.
D) greater than $50 billion to allow for inflation.
E) less than $10 billion to allow for inflation.
Correct Answer:
Verified
Q31: Narrbegin Exhibit 17.3 Q32: The balanced budget multiplier is always equal Q33: A decrease in real GDP would affect Q34: Because of the automatic stabilisers, a decline Q36: Equal increases in government expenditures and taxes Q37: Assume Parliament enacts a $500 billion increase Q38: When the government levies a $100 million Q39: Assume Parliament enacts a $10 billion increase Q40: Narrbegin Exhibit 17.3 Q140: The result of the balanced budget multiplier
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