Data from the Bureau of Labor Statistics show that the largest category of consumer spending is housing

An increase in aggregate demand normally does not cause inflation

a. True b. False Indicate whether the statement is true or false

If the marginal propensity to consume is 0.75 and the desired amount of increase in real GDP is $240 billion, then by how much would government spending have to increase?

a. $240 billion b. $80 billion c. $60 billion d. $30 billion