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4 years ago

Suppose we have the following scenario:

Business

1 answer:

Marat540 [252]4 years ago

4 0

Answer:

b. $300 billion.

Explanation:

Data provided in the question

Multiplier = 1.7

Tax rate = 20%

Increase in spending = $300

Total deficit = $1 trillion

Based on the above information, the deficit that arises from the increase in spending should be $300 billion as it is financed by the government that results in budget deficit

Hence, the correct option is B. $300 billion

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Calculation for how will operating income be affected

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