Suppose the current level of income is $600 billion,

Reference no: EM131005806

Suppose the current level of income is $600 billion, "the" multiplier is 4, the marginal tax rate is 20 percent, and the current budget deficit is $20 billion. If government spending is increased to raise income to $630b, once equilibrium is attained the budget deficit will be

a) $20b or less

b) more than $20b but less than $22b

c) at least $22b but less than $27b

d) $27b or more

Reference no: EM131005806

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