Refer to Figure 22-2. What is the marginal propensity to spend (z) in this economy? Select one: O A. 0.75 OB. 0.20 O C. 0.60 O D. 0.15 O E. 0.40

Economics For Today
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Chapter18: The Keynesian Model
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FIGURE 22-2
Refer to Figure 22-2. What is the marginal propensity to spend (z) in this economy?
Select one:
O A. 0.75
B. 0.20
O C. 0.60
D. 0.15
O E. 0.40
Transcribed Image Text:FIGURE 22-2 Refer to Figure 22-2. What is the marginal propensity to spend (z) in this economy? Select one: O A. 0.75 B. 0.20 O C. 0.60 D. 0.15 O E. 0.40
The diagram below shows desired aggregate expenditure for a hypothetical economy. Assume the following
features of this economy:
•marginal propensity to consume (mpc) = 0.75
•net tax rate (t) = 0.20
•no foreign trade
Desired Aggregate Expenditure (AE)
•fixed price level
• all expenditure and income figures are in billions of dollars.
250
175
100
0
450
AE
I + G
I
Actual National Income (Y)
Transcribed Image Text:The diagram below shows desired aggregate expenditure for a hypothetical economy. Assume the following features of this economy: •marginal propensity to consume (mpc) = 0.75 •net tax rate (t) = 0.20 •no foreign trade Desired Aggregate Expenditure (AE) •fixed price level • all expenditure and income figures are in billions of dollars. 250 175 100 0 450 AE I + G I Actual National Income (Y)
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