Suppose the marginal propensity to save (MPS) is 0.25. If government expenditure goes up by $50 billion, then you can re

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answerhappygod
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Suppose the marginal propensity to save (MPS) is 0.25. If government expenditure goes up by $50 billion, then you can re

Post by answerhappygod »

Suppose the marginal propensity to save (MPS) is 0.25. If
government expenditure goes up by $50 billion, then you can
reasonably expect that, ceteris paribus: Group of answer
choices
Real GDP (Y) in the economy will increase by $200 billion.
Real GDP (Y) in the economy will increase by $12.5 billion.
Real GDP (Y) in the economy will stay unchanged since this is
only affected by consumer spending and not government
expenditure.
Taxes will go up by $50 billion to balance the budget.
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