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Author Question: Assume that taxes depend on income. The MPCis 0.9 and tis 0.3. The government spending multiplier is (Read 136 times)

tuffie

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Question 1

Assume that taxes depend on income. The 
MPC is 0.8 and 
t is 0.25. The government spending multiplier is


◦ 1.67.
◦ 2.5.
◦ 5.
◦ 10.

Question 2

Assume that taxes depend on income. The 
MPC is 0.9 and 
t is 0.3. The government spending multiplier is


◦ 10.
◦ 2.7.
◦ 1.42.
◦ 1.17.


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Marked as best answer by tuffie on Apr 19, 2019

meltdown117

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