Suppose the MPC is .80, the MPI is .10, and the income tax rate is 10 percent. What is the multiplier in this economy?

Q: Suppose the MPC is .90 and the MPI is .10. If government expenditures go up $ 100 billion while…

A: The expenditure multiplier shows the impact of change in autonomous spending on total spending and…

Q: If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200…

A: Answer: Given, MPC (Marginal Propensity to consume) = 0.8 Recessionary Expenditure Gap= $200 To find…

Q: Find out the value of the multiplier if the MPC is zero?

A: Generally in the given question, MPC is = zero MULTIPLIER = ?

Q: Suppose two successive levels of disposable personal income are $16 and $21 billion, respectively,…

A: The marginal propensity to consume is a statistic that quantifies induced consumption, which…

Q: an increase in MPC, reduces the multiplier? true or fulse

A: The marginal propensity to consume is the concept which explains the increase in the consumption…

Q: Assume that the MPC is 0.9 and investment falls by $30 billion. What is the change in real GDP?

A: mpc is 0.9. Multiplier(M)= 1/1-mpc

Q: Find the value of multiplier when MPC is equals to 0.70

A:

Q: If you spend $100 and the MPC is 0.9, how much will total GDP rise because of this spending of  $100…

A: In an economy, any change in spending by the people of a country has the multiplier impact on the…

Q: Find the value of the multiplier when the MPS equals to 0.70

A: Formula:  Multiplier = 1/(1-MPC)  MPC = 1- MPS

Q: The value of multiplier depends on the _____

A: Multiplier refers to the magnitude by which the equilibrium output changes due to a change in…

Q: Briefly define the following terms and explain the relationship between them: MPC . . . . . . . . .…

A: MPC is marginal propensity to consume,which is change in consumption/change in income. Multiplier is…

Q: If MPC was equal to 0.5, would doubling your income double your consumption spending

A: The marginal propensity to consume (MPC) refers to the incremental change in income that is consumed…

Q: Suppose the government seeks to achieve a balanced budget by levying taxes of $50 billion and making…

A: If MPC=0.8 then  MPS=1-MPC MPS=1-0.8 MPS=0.2

Q: Calculate the Multiplier when the MPC is 0.97

A: Generally in the given question MPC is stated as = 0.97 Value of the multiplier needed to be…

Q: In the first economy (with MPC = 0.5), the $20 billion increase in investment causes equilibrium…

A: There are two closed economy countries  1st with 0.5 MPC and $20 billion Increases in Investment2nd…

Q: If the marginal propensity to consume (MPC) is .75 for a closed economy, what is the multiplier…

A: Marginal propensity to consume refers to the change in consumption with respect to change in income.

Q: If the MPC in an economy is 0.9, a $4 billion increase in government spending will ultimately…

A: MPC or Marginal Propensity to Consume measures the increase in spending with the increase in…

Q: In an economy the value of MPS is given as 0.72  Calculate the value of multiplier

A: We are given that the value of Marginal propensity to save is 0.72 We have to calculate the value of…

Q: The economic researcher defined the consumption function as follow: C = $600 billion + 0.9Y. a. What…

A: As you asked specifically, D, E, and F to answer so I will only answer these parts.   Marginal…

Q: Suppose an economy has an MPC = 0.875. 1. If government spending increase by $100, how much…

A: In economics, the marginal propensity to consume is a metric that quantifies induced consumption,…

Q: If the value of MPC is 0.8, find the value of multiplier.

A: Multiplier refers to a proportionality factor that ascertains the level of change that an…

Q: In a private closed economy where MPC= 0.8, if consumers reduce their spending by $20 billion and…

A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $100…

A: ANSWER     The marginal propensity to consumer (MPC) refers to the change in the change in the…

Q: Calculate the value of MPS when the value of MPC is 0.13

A: The formula for MPS is given as:- MPS = 1 - MPC

Q: In an economy the value of the marginal propensity to save is 0.39. calculate the value of MPC

A: # The value of marginal propensity to consume is given by the difference as:- MPC = 1 - MPS

Q: Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result of…

A: MPS+MPC =1

Q: If the MPC is 0.75, then the multiplier is 4. Select one: True False

A: Given MPC = 0.75 Multiplier = 4

Q: If the ratio of MPS and MPC is 1:4 then find the value of multiplier.

A: The economics as a study is based upon the idea that the resources which the economies have with…

Q: The multiplier effect demonstrates that:

A: Multiplier effect is one of the macroeconomic concept.

Q: An increase in the marginal propensity to consume will make the spending multiplier ? An increase in…

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

Q: An Economy has no imports or taxes, the MPC is 0.90 and real GDP is $12 trillion. If businesses…

A: Answer: Given values: MPC(marginal propensity to consume)=0.90GDP=$12 trillionIncrease in business…

Q: ind the value of multiplier when the value of MPS is 0.891

A: Initially in the question, We have to find the value of multiplier = ? MPS = 0.891

Q: Explain briefly how spending can multiply, and then calculate the spending multiplier when the MPC…

A:

Q: If MPC and MPS are equal, what is the value of multiplier?

A: MPS stands for marginal propensity to save and MPC stands for marginal propensity to consume.

Q: If the marginal propensity to save is 0.25, a. The marginal propensity to consume (MPC) is b. The…

A: Marginal propensity to consume (MPC) is defined as the proportion of additional income that a…

Q: net taxes were lowered from $5000 to $1000, the MPC is .75, and autonomous consumption spending is…

A: Disposable income refers to the remaining amount after paying all the necessary taxes.

Q: If changes to expenditures include consumption at $2000, investment at $600, government spending at…

A: Here, given information is: Consumption: 2000 Investment: 600 Government spending: 500 Exports: 100…

Q: If the value of MPS and MPC is same. What will be the value of multiplier

A: The information being given to us is as follows:- The value of Marginal propensity to save and…

Q: If disposable income is 90 percent of national income, the marginal propensity to consume ( out of…

A: From the given information: Disposable income = 90% of national income The marginal propensity to…

Q: How does an increase in tax influence the size of the multiplier

A: We know, Ad is given by, AD= C+ b(y-T)+I+G

Q: Suppose that a certain country has an MPC of .9 and a real GDP of $400 billion. If its investment…

A: The total production of good and services across the sectors of economy in a particular period of…

Q: If the MPC in an economy is 0.90, a $4 billion increase in government spending will ultimately…

A: Answer: Given, MPC = 0.90 Change in Government spending=44 billion The following formula will be…

Q: The value of marginal propensity to consume(MPC) is 0.61 Calculate the value of multiplier

A: Before preceding to the explanation and numerical part for our problem, let's first understand what…

Q: Find the value of MPC if MPS is 0.4.

A: Given: Marginal propensity to save = 0.4

Q: What is the multiplier effect during a recession and full employment?

A: The multiplier effect describes how many times money poured into the economy multiplies itself to…