Assume a closed economy, that taxes are fixed, and the marginal ...

[jman1234]

Assume a closed economy, that taxes are fixed, and the marginal propensity to consume is equal to 0.8. What is the government spending multiplier?
 
  A) 10 B) 5 C) 4 D) 3

Question 2

In an open economy, the government purchases multiplier will be larger the
 
  A) larger the marginal propensity to consume. B) smaller the marginal propensity to import.
  C) smaller the marginal income tax rate. D) All of the above are correct.

[anoriega3]

Answer to Question 1

B

Answer to Question 2

D

[jman1234]

Thanks for the timely response, appreciate it

[dawsa925]

Wow, this really help