Suppose the government, in an effort to avoid an increase in the deficit, votes for a budget neutral tax cut policy. Ass
Posted: Wed Jul 06, 2022 5:58 am
Suppose the government, in an effort to avoid an increase in thedeficit, votes for a budget neutral tax cut policy. Assume themarginal propensity to consume (MPC) is equal to 0.75 and taxes arecut by $15 billion . Round answers to the nearest billion, andspecify decreases as a negative number.
By how much will government spending change?
Change in government spending: $ billion
What is the resulting change in the equilibrium level of realGDP?
change in equilibrium level of real GDP: $
By how much will government spending change?
Change in government spending: $ billion
What is the resulting change in the equilibrium level of realGDP?
change in equilibrium level of real GDP: $