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Exhibit 15-3 Aggregate Demand and Supply Model

Question 159

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Exhibit 15-3 Aggregate demand and supply model
Exhibit 15-3 Aggregate demand and supply model -Suppose the economy in Exhibit 15-3 is in equilibrium at point E₁,and the marginal propensity to consume (MPC) is 0.75.Following Keynesian economics,to restore full employment,the government should cut taxes by: A) $0.20 trillion. B) $1 trillion. C) $0.5 trillion. D) $0.25 trillion.
-Suppose the economy in Exhibit 15-3 is in equilibrium at point E₁,and the marginal propensity to consume (MPC) is 0.75.Following Keynesian economics,to restore full employment,the government should cut taxes by:


A) $0.20 trillion.
B) $1 trillion.
C) $0.5 trillion.
D) $0.25 trillion.

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