Actual output is $2,000, potential output is $2,500, and the marginal propensity to consume (MPC) is 0.8. Which will return the economy to potential output?
O Increase government spending by $125.
O Increase government spending by $500.
O Decrease taxes by $125.
O Increase taxes by $125.

Question

18-06-2024
Business

Answered

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Actual output is $2,000, potential output is $2,500, and the marginal propensity to consume (MPC) is 0.8. Which will return the economy to potential output?
O Increase government spending by $125.
O Increase government spending by $500.
O Decrease taxes by $125.
O Increase taxes by $125.

Sagot :

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