Question
Suppose that the government increases expenditures by 150 billion while increasing taxes by 150 billion. Suppose that the MPC is 0.8.Using your understanding from the
Suppose that the government increases expenditures by 150 billion while increasing taxes by 150 billion. Suppose that the MPC is 0.8.Using your understanding from the aggregate expenditure model in class, what is the combined effect of these changes? why is the combined change not equal to zero?
This is the question asked in our mid semester.
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Industrial Relations in Canada
Authors: Fiona McQuarrie
4th Edition
978-1-118-8783, 1118878396, 9781119050599 , 978-1118878392
