Given full-employment output = $2,800, equilibrium output = $2,500, and MPS = 0.25, which of the following changes would most likely bring the economy to a full-employment level of national output?
A) $300 decrease in taxes.
B) $75 increase in government spending.
C) $75 decrease in taxes.
D) $300 increase in government spending.
E) $75 decrease in government spending.
Correct Answer:
Verified
Q58: Assume the marginal propensity to save is
Q65: If MPC = 0.80, how much should
Q65: Within the framework of the Keynesian Cross
Q69: Assume that an economy's real GDP multiplier
Q79: If the MPC = 1, the spending
Q98: Suppose real GDP is $800 billion when
Q99: Assume the marginal propensity to consume is
Q100: A $500 increase in investment will shift
Q103: An increase in government expenditures by $100
Q107: The equation for the spending multiplier is:
A)1
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents