An economy has no imports and no income taxes. An increase in autonomous expenditure of $5 trillion increases equilibrium expenditure by $50 trillion. Calculate the multiplier and the marginal propensity to consume. What happens to the multiplier if an income tax is introduced? >>> Answer to 2 decimal places. The multiplier is

Economics For Today
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ISBN:9781337613040
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Chapter19: The Keynesian Model In Action
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An economy has no imports and no income taxes.
An increase in autonomous expenditure of $5 trillion increases equilibrium expenditure by $50 trillion.
Calculate the multiplier and the marginal propensity to consume.
What happens to the multiplier if an income tax is introduced?
>>> Answer to 2 decimal places.
The multiplier is
Transcribed Image Text:An economy has no imports and no income taxes. An increase in autonomous expenditure of $5 trillion increases equilibrium expenditure by $50 trillion. Calculate the multiplier and the marginal propensity to consume. What happens to the multiplier if an income tax is introduced? >>> Answer to 2 decimal places. The multiplier is
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