In the Simple Keynesian Model (No Money Market)assume That Equilibrium

question 25

Multiple Choice

In the simple Keynesian model (no money market) assume that equilibrium output falls short of potential output by 300 units and the MPC = 0.8.The size of the tax cut needed to reach full employment is

• A)30.
• B)60.
• C)75.
• D)300.

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