If the MPC in an economy is 0.75, government could eliminate a recessionary expenditure gap of $50 billion by decreasing taxes by
A) $33.3 billion
B) $50 billion
C) $66.7 billion
D) $80 billion
Answer: C
If the MPC in an economy is 0.75, government could eliminate a recessionary expenditure gap of $50 billion by decreasing taxes by
A) $33.3 billion
B) $50 billion
C) $66.7 billion
D) $80 billion
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