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Hello, please help me with this, I continue to get it incorrect. 10. Crowding out effect Suppose economists observe that an increase in government spending
Hello, please help me with this, I continue to get it incorrect.
10. Crowding out effect Suppose economists observe that an increase in government spending of $12 billion raises the total demand for goods and services by $48 billion. Choices for the drop arrow lines are as follows: If these economists ignore the possibility of crowding out, they would estimate the marginal propensity to consume (MPC) to be Drop#1: 4, or 1/4, or 3/4 Drop#2: smaller, or larger Now suppose the economists allow for crowding out. Their new estimate of the MPC would be than their initial oneStep by Step Solution
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