If There Is a Recessionary Gap of $100 Billion and the MPC

question 47

Essay

If there is a recessionary gap of $100 billion and the MPC is 0.8, by how much must taxes be reduced to eliminate the recessionary gap? Assume that prices are stuck and that investment, net exports, government expenditures, and taxes do not change with changes in real GDP.

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Definitions:

Managed Care

A health care delivery system aimed at managing the cost, quality, and accessibility of healthcare services.

Clinical Practice

The application of theoretical and practical knowledge by healthcare professionals to diagnose, treat, and care for patients.

Specific Problems

Refers to unique or identifiable issues that need to be addressed or resolved within a given context.

Broker

A person or entity that acts as an intermediary, arranging transactions or negotiations between two parties.