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Author Question: If the government spending multiplier is 2 and government purchases increase by $200 billion, output ... (Read 400 times)

torybrooks

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Question 1

If the 
MPC is 0.5, the tax multiplier is


◦ -2.5.
◦ -2.
◦ -1.67.
◦ -1.

Question 2

If the government spending multiplier is 2 and government purchases increase by $200 billion, output will increase by


◦ $100 billion.
◦ $400 billion.
◦ $500 billion.
◦ $1,600 billion.


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Marked as best answer by torybrooks on Apr 19, 2019

Kimmy

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