In the Short-Run Keynesian Model, If the Mpc Equals 0

question 74

Multiple Choice

In the short-run Keynesian model, if the mpc equals 0.8, then to decrease planned aggregate spending by $30 billion at any output level, government spending must be decreased by ________ or net taxes must be increased by ________.

• A)$30 billion; $30 billion
• B)more than $30 billion; more than $30 billion
• C)less than $30 billion; less than $30 billion
• D)$30 billion; more than $30 billion

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Plan Transitions

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