To eliminate an AD shortfall of $120 billion when the economy has an MPC of 0.75, the government should decrease taxes by

A. $400 billion.
B. $40 billion.
C. $120 billion.
D. $30 billion.


Answer: B

Economics

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Indicate whether the statement is true or false

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In the neoclassical growth model, if two countries are exactly the same but one has a lower depreciation rate, we would expect that country to have

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Which of the following is not an accurate description of the point at which the labor supply and labor demand curves meet?

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Economics