Question
Assume that marginal propensity to consume is 0.8, and potential output is $800 billion. If current real GDP is $700 billion, which of the following
Assume that marginal propensity to consume is 0.8, and potential output is $800 billion. If current real GDP is $700 billion, which of the following policies would bring the economy to potential output? A. Decrease taxes by $100 billion. B. Increase taxes by $100 billion. C. Decrease taxes by $25 billion. D. Decrease government transfers by $25 billion. E. Decrease taxes by $20 billion.
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Macroeconomics
Authors: David Colander
8th edition
978-0078004407, 78004403, 978-0077247171, 77247175, 978-0077307110
