If the MPS in an Economy Is 0

question 344

Multiple Choice

If the MPS in an economy is 0.4, government could shift the aggregate demand curve leftward by $50 billion by

• A) reducing government expenditures by $125 billion.
• B) reducing government expenditures by $20 billion.
• C) increasing taxes by $50 billion.
• D) increasing taxes by $250 billion.