Assume the government is running a budget deficit of $40 billion and cuts spending by this amount. Suppose that this cut in spending resulted in a new budget deficit of $30 billion. With a multiplier of 1.5 what must be the value of the deficit response index?

Question

Quizplus · Accepted Answer

The Answer of Assume the government is running a budget deficit of $40 billion and cuts spending by this amount. Suppose that this cut in spending resulted in a new budget deficit of $30 billion. With a multiplier of 1.5 what must be the value of the deficit response index?

Assume the Government Is Running a Budget Deficit of $40