Suppose The government decides to increase taxes by 40 billion in order to increase social security benefits by the same amount

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Suppose The government decides to increase taxes by 40 billion in order to increase social security benefits by the same amount

if the MPC is 0.9 will aggregate demand increase decrease or remain unchanged in at current prices with this combined tax transfer policy

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1 answer:

Marina86 [1] · Answer 1 · 2022-03-10T01:23:02+03:00

Answer:

Suppose the government decides to increase taxes by $40 billion in order to increase Social Security benefits by the same amount. If the MPC is 0.9, will aggregate demand increase, decrease or remain unchanged at current prices with this combined tax transfer policy? No change Increase in AD O Decrease in AD