If the marginal propensity to consume is 2/3, then the government purchases multiplier is Use letters...
If the marginal propensity to consume is 2/3, then the
government purchases multiplier is
Use letters in alphabetical order to select options
A
2
B
0.33
C
1.67
D
3
Homework Answers
Answer D 3
Explanation
Multiplier = 1/MPS
MPS = 1 - MPC = 1 - 2/3 = 1/3
Multiplier = 1/(1/3) = 3
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If the marginal propensity to consume is 2/3, then the
government purchases multiplier is
Use letters...
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Suppose the marginal propensity to consume is 0.7 and the government votes to increase taxes by $1.5 billion. Round to the nearest tenth if necessary. Assume the tax rate and the marginal propensity to import are 0. Calculate the tax multiplier tax multiplier:-2.3 Calculate the resulting change in the equilibrium quantity of real GDP demanded -3.5 billion
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