If consumption is defined as C = 2,000 + 0.8Y, then the marginal ...

[javeds]

If consumption is defined as C = 2,000 + 0.8Y, then the marginal propensity to save is 0.8.
 
  Indicate whether the statement is true or false

Question 2

If the tax multiplier is -1.5 and a 200 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.)
 
  A) a 300 billion decrease in GDP
  B) a 30 billion increase in GDP
  C) a 300 billion increase in GDP
  D) a 133.33 billion increase in GDP
  E) a 133.33 billion decrease in GDP

[14vl19]

Answer to Question 1

FALSE

Answer to Question 2

A

[javeds]

Excellent

[jordangronback]

Gracias!