Question
In a private closed economy where MPC = 0.75, if consumers reduce their spending by $5 billion and firms cut investments by $5 billion, then
In a private closed economy where MPC = 0.75, if consumers reduce their spending by $5 billion and firms cut investments by $5 billion, then equilibrium GDP will decrease by
Multiple Choice
- $40 billion.
- $10 billion.
- $75 billion.
- $20 billion.
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Essentials of Econometrics
Authors: Damodar Gujarati, Dawn Porter
4th edition
73375845, 978-0071276078, 71276076, 978-0073375847
