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In Middletown 10 cents out of every additional dollar of income earned is saved. A fiscal policy action in Middletown caused aggregate demand to increase
In Middletown 10 cents out of every additional dollar of income earned is saved. A fiscal policy action in Middletown caused aggregate demand to increase by a total of 100 billion. Which of the following is the minimum fiscal policy action that could have caused the 100 billion increase in aggregate demand ? A The government increased spending by 100 billion. B The government increased spending by $10 billion. C The government increased income taxes by $10 billion. DT he government decreased income taxes by $10 billion. E The government decreased transfers by 90 billion
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