Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2 What i

Question

Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2 What is the multiplier? _________________
If government spending (G) increases by $50B, how much will real GDP increase? ________________________________
If taxes also increase by $50B, consumption (C) will fall by how much? _______________________________________
The result will be a $200B decline in real GDP. Was this policy of increasing government spending and taxes by the same amount expansionary, contractionary, or ineffective?______________________________ Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2 What is the multiplier? _________________ Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2 What is the multiplier? _________________

If government spending (G) increases by $50B, how much will real GDP increase? ________________________________ If government spending (G) increases by $50B, how much will real GDP increase? ________________________________

If taxes also increase by $50B, consumption (C) will fall by how much? _______________________________________ If taxes also increase by $50B, consumption (C) will fall by how much? _______________________________________

The result will be a $200B decline in real GDP. Was this policy of increasing government spending and taxes by the same amount expansionary, contractionary, or ineffective?______________________________ The result will be a $200B decline in real GDP. Was this policy of increasing government spending and taxes by the same amount expansionary, contractionary, or ineffective?______________________________

Explanation / Answer

1/.2 =5

250

50

insffective

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