If government purchases are increased by $100, taxes are reduced by $100, and the MPC is 0.75, equilibrium output will change by $700. O $900. O $30. zero.
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- What is the 'mpc' ? a) 1/3 b) 1/2 c) 2/3 d) 4 e) 3/4The formula for the government spending multiplier is A) 1/(1+ MPC). B) 1/MPS. O C) 1/MPC. OSuppose the MPC is 0.6. Beginning from equilibrium, investment demand rises by 30. (a) How much does equilibrium output increase? (b) How much of that increase is extra consumption demand?
- What is the effect on savings of a tax cut of $15 billion? Is this inflationary or deflationary? Assume that the MPC is 0.9.The MPC is 0.41 If change in consumption is $650 find the change in incomeQuestion 46 Assume that the MPC is 0.70. What is the income multiplier? Question 46 options: a) 0.3 b) 3.33 c) 4 d) 2
- If the MPC IS 0.9 What should the government do to increase GDP by $4500?15. If government's spending increases by 60 and marginal propensity to consume is 0.8, how will the increase in equilibrium income be? 65 b) 300 90 d) 250The consumption function is defined a C= 800 + (0.8)YD, the marginal income tax rate is t = 0.5, and autonmous investment decreases by 50, then the budget surplus would be?
- If the MPC is 0.8 and government spending decreases by $50 million, then equilibrium GDP will decrease by: A) $250 million. B) $40 million. C) $50 million. D) $200 million.In an economy where the MPC is 0.7, the proportional tax rate is 0.25 and the marginal propensity to import is 0.2, the multiplier will be:Select one:a.0.675b.1.48c.2.35d.2.1simple maoro model where the marginal propensity to consume out of disposable income is 0.8, the net tax rate is 0.25, and the marginal propensity lo import is 0.12, he simple multipler wil be OA 0.480 OB. 123 OC. 2003 OD. 1471 OE 2110