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Author Question: If an economy's MPCis 0.75 and the MPMis 0.25, then an increase in government spending of $2,000 ... (Read 86 times)

kaid0807

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Question 1

The open economy multiplier will increase if


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

Question 2

If an economy's 
MPC is 0.75 and the 
MPM is 0.25, then an increase in government spending of $2,000 will increase income by


◦ $2,100.
◦ $3,000.
◦ $4,000.
◦ $8,000.


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Marked as best answer by kaid0807 on Apr 19, 2019

ecabral0

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