This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What is the government purchases multiplier if the tax rate is 0.1 and the marginal propensity to ... (Read 163 times)

drink

  • Hero Member
  • *****
  • Posts: 554
on: Jun 29, 2018
What is the government purchases multiplier if the tax rate is 0.1 and the marginal propensity to consume is 0.9? Assume the economy is closed.
 
  A) 5.3 B) 10 C) 11.1 D) 100

Question 2

Suppose the president is successful in passing a 5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?
 
  A) There is a 20 billion decrease in equilibrium GDP.
  B) There is a 15 billion decrease in equilibrium GDP.
  C) There is a 15 billion increase in equilibrium GDP.
  D) There is a 20 billion increase in equilibrium GDP.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

joewallace

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

B


drink

  • Member
  • Posts: 554
Reply 2 on: Jun 29, 2018
Gracias!

nothere

  • Member
  • Posts: 324
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

Did you know?

Hypertension is a silent killer because it is deadly and has no significant early symptoms. The danger from hypertension is the extra load on the heart, which can lead to hypertensive heart disease and kidney damage. This occurs without any major symptoms until the high blood pressure becomes extreme. Regular blood pressure checks are an important method of catching hypertension before it can kill you.

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

There are more nerve cells in one human brain than there are stars in the Milky Way.

A Glitch Interrupts the Vela Pulsar’s Spindown Rate A Glitch Interrupts the Vela Pulsar’s Spindown Rate
Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ... Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ...
Respiratory Rate Ranges of Various Age Groups Respiratory Rate Ranges of Various Age Groups
Situations Causing Changes in Respiratory Rate Situations Causing Changes in Respiratory Rate
Population growth and growth rate, 1950 - 2100 Population growth and growth rate, 1950 - 2100
Government in America: People, Politics, and Policy, AP Government in America: People, Politics, and Policy, AP
Video: The Hypothalamus: The Body's Thermostat (Human Thermostat)

For a complete list of videos, visit our video library