If se economists ignore possibility of crowding out, Ask an Expert

Economics

Q. Suppose economists observe that an increase in government spending of $10 billion raises total demand for goods and services by $30 billion.

a. If se economists ignore possibility of crowding out, illustrate what would they approximate marginal propensity to consume (MPC) to be?

b. Now suppose economist allow for crowding out. Would their new approximate of MPC be larger or smaller than their initial one?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9306413

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