Mathematics, 12.04.2021 07:00 khan2491
Suppose economists observe that an increase in government spending of $14 billion raises the total demand for goods and services by $70 billion. If these economists ignore the possibility of crowding out, they would estimate the marginal propensity to consume (MPC) to be . Now suppose the economists allow for crowding out. Their new estimate of the MPC would be than their initial one.
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Suppose economists observe that an increase in government spending of $14 billion raises the total d...
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