Author Question: If the marginal propensity to consume (MPC) is 0.75, and if policy makers wish to increase real GDP ... (Read 15 times)

Metfan725 · **on:** Jun 30, 2018

If the marginal propensity to consume (MPC) is 0.75, and if policy makers wish to increase real GDP by 300 million, then by how much would they have to change taxes?
a. -300 million.
b. -200 million.
c. -100 million.
d. -50 million.

Question 2

Keynesians believe that an increase in the money supply will lead to:
a. both c and d.
b. all of the following.
c. an increase in the price level.
d. a decrease in nominal GDP.
e. an increase in real GDP.