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

question 116

Multiple Choice

In the short-run Keynesian model, if the mpc equals 0.8, then to increase aggregate spending by $20 billion at any output level, government spending must be increased by ______ or net taxes must be decreased by _____.

• A) $20 billion; $20 billion
• B) more than $20 billion; more than $20 billion
• C) less than $20 billion; less than $20 billion
• D) $20 billion; more than $20 billion

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Peplau's Theory

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