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Author Question: Assume that taxes depend on income. The MPCis 0.8 and tis 0.2. The government spending multiplier is (Read 119 times)

Kthamas

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Question 1

Assume that taxes depend on income. The 
MPC is 0.5 and 
t is 0.5. The government spending multiplier is


◦ 1.33.
◦ 2.
◦ 2.5.
◦ 4.

Question 2

Assume that taxes depend on income. The 
MPC is 0.8 and 
t is 0.2. The government spending multiplier is


◦ 1.25.
◦ 2.78.
◦ 4.
◦ 4.17.


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Marked as best answer by Kthamas on Apr 19, 2019

Carissamariew

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Kthamas

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Reply 2 on: Apr 19, 2019
Great answer, keep it coming :)


dantucker

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Reply 3 on: Yesterday
Excellent

 

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