Which of the following statements is incorrect?Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than a $15 billion increase in taxes would. If the MPC is 0.8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion. Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4.A government surplus is an anti-inflationary; a government deficit is expansionary.

Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4.

Explanation:

An increase in government spending of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4.

Tax cuts/increases do not have the same effect as changes in government spending. The multiplier = 1/MPS is used to measure how an economy will react as a result of a change in government spending.

answer; (1) blank; decreases; ///blank(2) increases; ///blank(3)increases;

answer(eu) is the correct answer;