Suppose there is a recessionary gap of $450 billion and the MPC is 0.90 . How much does the federal government must spend to fix the gap? $35 billion $50 billion $60 billion $45 billion O$45billion O$60 billion O$50 billion O$35 billion does the federal government must spend to fix the gap? Suppose there is a recessionary gap of $450 billion and the MPC is 0.90. How much
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90 Spending multiplier = 1 / (1 - 0.90) = 1 / 0.10 = 10 Show more…
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