If the marginal propensity to consume equals 0.80, the tax rate equals 0.20, and the marginal propensity to import equals 0.05, what is the value of the government purchases multiplier? The government purchases multiplier is equal to (enter your response rounded to two decimal places).

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A: Multiplier:Multiplier can be calculated as follows:

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A: Answer: Correct option: 3 (the ratio of the change in the equilibrium level of output to the change…

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Q: If tax multiplier is -3, then MPS is equal ?? Answer please

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Q: Calculate the government purchases multiplier (to one decimal place) if the marginal propensity to…

A:

Q: ​If the marginal propensity to consume of an economy is 0.7, then the simple spending multiplier is:

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Q: If the MPS is 0.1 , Then the multiplier is 10 . true or false?

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Q: Suppose that the government increases taxes and government purchases by equal amounts. What happens…

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A: The sum of marginal propensity to consume and marginal propensity to save is 1.

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Q: What happens to the real GDP if the government increases spending by $50 million and the government…

A: The government multiplier = 1.5 Government spending = $50 million

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A: According to the question, it is given that : The government spends an additional $926 billion The…

Q: Suppose that out of the original 100 of government spending, 33 will be recycled back into purchases…

A: The aggregate expenditure in an economy is a function of consumption expenditure, investment…

Q: Suppose the following data for an economy; a consumption function of C = 800 + 0.8Yd, Investment…

A: Aggregate expenditure is the sum of consumption spending, investment spending and government…

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A: Marginal propensity consume shows the ratio of  change in consumption to change in income  MPC=…

Q: The multiplier (expenditure multiplier) is the ratio between which two measures? marginal propensity…

A: Multiplier: - it is a fraction that shows the magnitude of the change in national income due to a…

Q: Which of the following statements are correct? The introduction of government spending increases…

A: From the following, the correct statement is:

Q: Graphically illustrate the effect of an increase in government purchases. Explain the government…

A: The government purchases are the expenses that are done on the goods and services by all the…

Q: If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential GDP…

A: here we can calculate the change in government purchase and choose the correct option which are as…

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Q: Find the value of multiplier if MPS is 0

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A: MPC, when there is no crowding out, can be calculated as shwon below.

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A: The multiplier effect occurs when an initial change in autonomous spending led to a greater final…

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A: Marginal Propensity to Consume is nothing but the ratio of change in consumption with the change in…

Q: If the marginal propensity to consume (MPC) is 0.80, and if policy makers wish to increase real GDP…

A: Change in GDP =  - MPC / (1 - MPC)* change in taxes 200=  -0.80/(1-0.80) change in taxes* Change in…

Q: Consider a hypothetical economy in which households spend $0.75 of each additional dollar of their…

A: Given:

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A: The fiscal policy of the government would result in the policies of the government involving…

Q: Calculate the fiscal multiplier if the marginal propensity to save is 0.2.

A: Marginal Propensity to Save = 0.2 Fiscal Multiplier = -MPCMPSor Fiscal multiplier = -MPC1 - MPC

Q: Consider an economy in which the marginal propensity to consume is 0.8 and GDP is currently at…

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Q: If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential GDP…

A: here we can find the correct option which are as follow-

Q: In an open economy with government, the marginal propensity to consume is 0.67, the tax rate is 0.2…

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Q: Explain carefully why the tax multiplier is negative and why it is smaller in absolute value than…

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Q: calculate the expenditure multiplier, if the marginal propensity to consume = .80, the tax rate =…

A:

Q: he MPS is 0.1 and the income tax rate is 0.33 the multiplier is approximately

A: Given, Marginal Propensity to Save [MPS] = 0.1 Income tax rate = 0.33 The Marginal Propensity to…