Question
The economy is in a recession. The government enacts a policy to increase spending by $12 billion. The MPS is 0.1. What would be the
The economy is in a recession. The government enacts a policy to increase spending by $12 billion. The MPS is 0.1. What would be the full increase in real GDP from the change in government spending, assuming that the aggregate supply curve is horizontal across the range of GDP being considered?
Multiple Choice
- $120 billion
- $12 billion
- $30 billion
- $10 billion
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Principles of Economics
Authors: N. Gregory Mankiw
8th edition
1305585127, 978-1305971493, 978-1337516860, 1337516864, 978-0357539200, 978-1305585126
