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Author Question: If consumption is defined as C = 2,000 + 0.8Y, then the marginal propensity to save is 0.8. ... (Read 58 times)

javeds

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on: Jun 29, 2018
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


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14vl19

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Reply #1 on: Jun 29, 2018
Answer to Question 1

FALSE

Answer to Question 2

A


javeds

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

ghepp

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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