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Question : Assume that C = 400 + 0.75 (Y -100). Then

Assume that C = 400 + 0.75 (Y -100). Then which of the following is true?

Suppose the federal government needs to balance the budget, which means that when the government spending increases, taxes must increase equally. In this case, government spending multiplier is called the balanced-budget multiplier, defined as the increase in real GDP/increase in government spending. By following the example from the previous question, how mcuh is the balanced-budget multiplier?

Assume that C = 400 + 0.75 (Y -100). Then which of the following is true?

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