a ssume HPC =0.80 and that taxes are at by64billiongoverment purchases are increused by $4billionAccord ing to keynesian analy sis (fiscal policy) How michwill ŘGDPchang e? will it increase or deciease?

here we calculate the Change in RGDP by the help of MPC using in the formula which are as follow-

Answered: a ssume HPC =0.80 and that taxes are at…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 12P

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suppoose the MPC is 0.9 aand the MPI is 0.1.If government expenditure go up $100 billion while taxex fall $10billion, what hhaappen ttoo thhe equlibribum oof real GDP
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a ssume HPC =0.80 and that taxes are at by64billion goverment purcha ses are increused b, $4billion According to keynesian analy sis (fiscal policy) How mich will RGDPchang e? will it increase ordeciease?