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Author Question: If an economy's MPCis 0.95 and the MPMis 0.15, then an increase in government spending of $1,000 ... (Read 70 times)

rl

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Question 1

The open economy multiplier will decrease if


◦ the 
MPC decreases.
◦ the 
MPM decreases.
◦ either the 
MPM or the 
MPC decreases.
◦ the 
MPM increases.

Question 2

If an economy's 
MPC is 0.95 and the 
MPM is 0.15, then an increase in government spending of $1,000 will increase income by


◦ $1,000.
◦ $4,500.
◦ $5,000.
◦ $8,000.


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Marked as best answer by rl on Apr 19, 2019

Moriaki

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Moriaki

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