Question
An economy is in recession with an MPC of 0.2, and there is a GDP gap of $100 billion. The government can decrease spending by
An economy is in recession with an MPC of 0.2, and there is a GDP gap of $100 billion.
The government can decrease spending by$80 billion to eliminate the gap.
The government can increase taxes by _______ billion to eliminate the gap.
are my answers correct and if not what should the answers be.
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Macroeconomics Principles Applications And Tools
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
7th Edition
978-0134089034, 9780134062754, 134089030, 134062752, 978-0132555234
