Suppose the short-run equilibrium level of real GDP is $3,000 billion and the MPC = 0.75. If full employment (natural) real GDP is $4,000 billion, what fiscal policy action could the government undertake to put the economy at full-employment equilibrium? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Increase government spending by $1,000 billion b Decrease taxes by $250 billion с Decrease government spending by $250 billion P Increase both government spending and taxes by $1,000 billion

Suppose the short-run equilibrium level of real GDP is $3,000 billion and the MPC = 0.75. If full employment (natural) real GDP is $4,000 billion, what fiscal policy action could the government undertake to put the economy at full-employment equilibrium? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Increase government spending by $1,000 billion b Decrease taxes by $250 billion с Decrease government spending by $250 billion P Increase both government spending and taxes by $1,000 billion

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter21: Fiscal Policy

Section: Chapter Questions

Problem 20SQ

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