Question
7. If the MPS is .25 and the current GDP is $180,000 and the target level of GDP is $160,000, what change in Government Spending
7. If the MPS is .25 and the current GDP is $180,000 and the target level of GDP is $160,000, what change in Government Spending is required to reach the target?
8. If the MPS is .67 and the current GDP is $150,000 and the target level of GDP is $210,000, what change in Government Spending is required to reach the target?
9. If the MPS is .20 and the current GDP is $150,000 and the target level of GDP is $175,000 what change in taxes would be required to reach the target?
10. If the MPS is .90 and the current GDP is $160,000 and the target level of GDP is $130,000 what change in taxes would be required to reach the target?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the change in government spending or taxes required to reach the target GDP we need to use the concept of the expenditure multiplier and ...
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Step: 2
Step: 3
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Principles Of Economics
Authors: OpenStax
2nd Edition
1506699863, 978-1506699868
