Question
A Sticky-Wage AS/AD economy has a spending multiplier equal to 1.5 and a direct tax rate of 40 percent. Government spending is 240 and there
A Sticky-Wage AS/AD economy has a spending multiplier equal to 1.5 and a direct tax rate of 40 percent. Government spending is 240 and there is a government budget deficit equal to 20. To eliminate the budget deficit b2 = 0 will require that government spending be reduced to G = _________.
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Microeconomics
Authors: Paul Krugman, Robin Wells
5th edition
1319098780, 1319098789, 978-1319098780
