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22 Mar 2019
Assume that a hypothetical economy with an MPC of 0.9 is experiencing a severe recession.
By how much would government spending have to rise to shift the aggregate demand curve rightward by $50 billion?
Instructions: Round your answer to two decimal places.
$ billion
How large a tax cut would be needed to achieve the same increase in aggregate demand?
Instructions: Round your answer to two decimal places. Enter a positive value.
$ billion
Determine one possible combination of government spending increases and tax increases that would accomplish the same goal.
Increase spending by $ billion and increase taxes by $ billion.
Assume that a hypothetical economy with an MPC of 0.9 is experiencing a severe recession.
By how much would government spending have to rise to shift the aggregate demand curve rightward by $50 billion?
Instructions: Round your answer to two decimal places.
$ billion
How large a tax cut would be needed to achieve the same increase in aggregate demand?
Instructions: Round your answer to two decimal places. Enter a positive value.
$ billion
Determine one possible combination of government spending increases and tax increases that would accomplish the same goal.
Increase spending by $ billion and increase taxes by $ billion.
Verified Answer
Hubert KochLv2
23 Mar 2019
Jeffrey
JD Candidate at Stanford Law School4 Jun 2020
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