Suppose that marginal propensity to consume is equal to 0.9, and the government increases its spending by $200 billion. This new increase in spending is financed by a fresh increase in taxes equal to $200 billion. As a result of this, GDP will:
a. not change at all.
b. decrease by $200 billion.
c. increase by $2,000 billion.
d. increase by $200 billion.
e. increase by $1,800 billion.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose that marginal propensity to consume is equal to 0.9, and the government increases its spending by $200 billion. This new increase ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What do parameters allow you to do? A. Parameters let you generate a report from your query. B. Parameters let you run more specific and complex queries. C. Parameters let you browse information from one table quickly. D.
Answers (1)
Riley has figured out how to unlock his bedroom door with a paper clip. what has he most likely overcome in his new use of the paper clip?
Answers (1)
Describe 6 step in order to cash process
Answers (1)
Liquidity ratios are used to measure a firm's ability to meet its obligations as they come due. Two of the most commonly used liquidity ratios are the: (1) Current ratio and (2) Quick, or acid test, ratio.
Answers (1)
Al, who is single, has a gain of $40,000 on the sale of § 1244 stock (small business stock) and a loss of $80,000 on the sale of § 1244 stock. As a result, Al has a $40,000 ordinary loss. True False
Answers (1)
New Questions in Business
What is the remaining balance on a 30-year, $400,000 mortgage after 70 months? Assume monthly payments and a nominal rate (monthly compounding) of 5.90%.
Answers (1)
Which government behavior is not involved in consumer-protection regulations?
Answers (1)
Data for an economy shows that the unemployment rate is 10%, the participation rate 80 percent, and 200 million people 16 years or older are not in the labor force. how many people are in the working-age population in this economy?
Answers (1)
Normally, grant money is treated as gift aid that does not need to be paid back. Which of the following events would require a student to pay back the amount received as grant?
Answers (2)
PA1. LO 2.1Ballentine Manufacturing produces and sells lawnmowers through a national dealership network.
Answers (1)