Question 4 · Introducció a la Macroeconomia UPF 2019

Question 4 (0.25 points). Goods market fiscal multiplier

In the goods market framework, assume a marginal propensity to save equal to 0.3. If government purchases ($G$), net taxes ($T$), and investment ($I$) are exogenous, which of the subsequent shocks delivers the largest expansion in output?