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Author Question: Use the aggregate expenditures model and assume an economy is in equilibrium at 6 trillion which is ... (Read 84 times)

Jkov05

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on: Jun 30, 2018
Use the aggregate expenditures model and assume an economy is in equilibrium at 6 trillion which is 500 billion above full-employment GDP. If the marginal propensity to consume (MPC) is 0.75, full-employment GDP can be reached if government spending:
 a. decreases by 75 billion.
  b. decreases by 125 billion.
  c. decreases by 500 billion.
  d. is held constant.

Question 2

Most commercial banks belong to the Federal Reserve System.
 a. True
  b. False
  Indicate whether the statement is true or false


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macybarnes

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Reply #1 on: Jun 30, 2018
Answer to Question 1

b

Answer to Question 2

False


Jkov05

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Reply #2 on: Jun 30, 2018
Thank you :)


macybarnes

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Reply #3 on: Jun 30, 2018
Happy to help you


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