The economy is in a recession. The government enacts a policy to increase spending by $2 billion. The MPS is 0.2. What would be the full increase in real GDP from the change in government spending assuming that the aggregate supply curve is horizontal across the range of GDP being considered?

A. $6 billion

B. $8 billion

C. $10 billion

D. $16 billion

C. $10 billion

Economics

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Fill in the blank: National income accountants who measure GDP try to avoid the ________ problem by only measuring the market value of all final goods and services produced within a country

A) double trouble B) double indemnity C) double counting D) double jeopardy E) double-your-pleasure

Economics

At long-run macroeconomic equilibrium, ________

A) an inflationary gap exists B) real GDP equals potential GDP C) a recessionary gap exists D) real GDP is less than potential GDP but is as close as it is possible to be

Economics