Question
4. Consider an economy whose households save 20% of their income. If the government lowers its transfers by $100 billion, then the real GDP will:
4. Consider an economy whose households save 20% of their income. If the government lowers its transfers
by $100 billion, then the real GDP will:
a. decrease by $125 billion.
b. increase by $125 billion.
c. decrease by $500 billion.
d. decrease by $400 billion.
(can you explain the steps in detail)
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Fundamental Accounting Principles
Authors: John Wild, Ken Shaw, Barbara Chiappett
23rd edition
1259536351, 978-1259536359
