If the marginal propensity to consume is. 80 and both taxes and government purchases increase by $50 billion, real gdp will

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Quinn Avila

Business

6 March, 05:10

If the marginal propensity to consume is. 80 and both taxes and government purchases increase by $50 billion, real gdp will

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Kassidy Conway · Answer 1

If the marginal propensity to consume is. 80 and both taxes and government purchases increase by $50 billion, real gdp will icrease by $50 billion.

GDP stands for gross domestic product. An increase in taxes and government purchases cause increase in GDP value. So when purchases increase by $50 billion, real GDP value also increases by $50 billion.