Calculating Fiscal Policy Impact (AG vs AT) 1. AQ = m x ASpending Let MPC=.90 New Gov't Spending = $100,000 Find new/added GDP. Recall: m
Calculating Fiscal Policy Impact (AG vs AT) 1. AQ = m x ASpending Let MPC=.90 New Gov't Spending = $100,000 Find new/added GDP. Recall: m = 1-MPC MPS 2. AQ = m x ASpending Let MPC=.90 New Spending = $100,000, via a tax rebate (tax cut of $100,000) Find new/added GDP. Why not the same as 1)
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