Assume that the MPC is 0.75. If government spending increases by $400, equilibrium output ________; and if taxes increase by $400, equilibrium output ________.
A) increases by $1,600; decreases by $1,600
B) increases by $1,600; decreases by $1,200
C) increases by $1,200; decreases by $1,600
D) increases by $400; decreases by $400
Correct Answer:
Verified
Q192: Refer to the information provided in Figure
Q193: Refer to the information provided in Figure
Q194: You are hired by the Bureau of
Q195: If government spending is increased by $300,
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Q198: If government spending is increased by $550
Q199: As the size of the MPC increases,
Q200: If the tax multiplier is -8.42, then
Q201: Refer to the information provided in Table
Q202: Refer to the information provided in Table
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