Assume the MPS is 0.25. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will O a. decrease Real GDP by $100 billion. b. increase Real GDP by $133.33 billion. Oc. decrease Real GDP by $400 billion. d. increase Real GDP by $400 billion. e. decrease Real GDP by $133.33 billion. Of. none of the above is correct.

Assume the MPS is 0.25. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will O a. decrease Real GDP by $100 billion. b. increase Real GDP by $133.33 billion. Oc. decrease Real GDP by $400 billion. d. increase Real GDP by $400 billion. e. decrease Real GDP by $133.33 billion. Of. none of the above is correct.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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