Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? Select one or more: a. Public spending, G, increases by 200 b. real GDP was larger than nominal GDP from 2002 to 2008 Public spending, G, increases by 150 c. Investment, I, increases by 150 d. Taxes, T, decrease by 200

Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? Select one or more: a. Public spending, G, increases by 200 b. real GDP was larger than nominal GDP from 2002 to 2008 Public spending, G, increases by 150 c. Investment, I, increases by 150 d. Taxes, T, decrease by 200

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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