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Author Question: If government spending is increased by $500, taxes are reduced by $200, and the MPSis 0.2, ... (Read 45 times)

bobypop

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Question 1

If the tax multiplier is -5.25, then the government purchases multiplier


◦ is 6.25.
◦ is 4.75.
◦ is 0.75.
◦ cannot be determined because the 
MPS is not given.

Question 2

If government spending is increased by $500, taxes are reduced by $200, and the 
MPS is 0.2, equilibrium output will change by


◦ $1,500.
◦ $1,700.
◦ $3,300.
◦ $3,500.


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Marked as best answer by bobypop on Apr 19, 2019

kingdude89

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kingdude89

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