In a closed economy with government, the marginal propensity to consume is 0.5 and the tax rate is 0.2. Calculate the multiplier. Answer the question by providing the appropriate number including at least 2 decimal points in the box below (e.g., 1.23). Do not enter a comma, space, letters, words or symbols (such as %). Failure to follow these instructions will result in your answer being marked as incorrect.
In a closed economy with government, the marginal propensity to consume is 0.5 and the tax rate is 0.2. Calculate the multiplier. Answer the question by providing the appropriate number including at least 2 decimal points in the box below (e.g., 1.23). Do not enter a comma, space, letters, words or symbols (such as %). Failure to follow these instructions will result in your answer being marked as incorrect.
Chapter21: Fiscal Policy
Section: Chapter Questions
Problem 20SQ
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