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5 years ago
Suppose that Congress allocates $5 billion to an "energy-efficient appliance rebate" program. It also raises taxes by $5 billion to keep the deficit from growing. If the marginal propensity to consume is 0.8, what is the effect on equilibrium GDP?
A) GDP does not change.
B) GDP increases by $25 billion.
C) GDP increases by $4 billion.
D) GDP increases Answer: llion.
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InMacro

InMacro


Edition: 1st
Authors:
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wrote...
5 years ago
llion.
Answer: D
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