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March 28, 2015

Homework Help: macroeconomics

Posted by jo on Wednesday, July 15, 2009 at 6:17pm.

Assume that the government purchases decrease by 10 billion, with other factors held constant including the price level. Calculate the change in the level of real GDP demanded for each of the following values of the MPC. Then calculate the change if the government, instead of reducinG its purchases, increased aitonomous net taxes by 10 billion. a.0.9 b. 0.8 c. 0.75 d. 0.6 I have been struggling with these questions for days and what I have come up with for the first part of the question is a. 0.1 b. 0.2 c. 0.25 d. 0.4 Have I done these correctly? And how do I figure out the second part to the question?

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