Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanc budget change? Does your answer depend on the marginal propensity to consume? (
Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanc budget change? Does your answer depend on the marginal propensity to consume? (
Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN:9781305280601
Author:William J. Baumol, Alan S. Blinder
Publisher:William J. Baumol, Alan S. Blinder
Chapter8: Aggregate Demand And The Powerful Consumer
Section: Chapter Questions
Problem 8DQ
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