If the marginal propensity to consume (MPC) is 0.50, the value of the spending multiplier is:
a. 5.
b. 1.
c. 2.
d. 5.
c
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The figure above illustrates the gasoline market. There is no external benefit from gasoline. If a tax on gasoline is imposed as shown in the figure, then the total tax revenue earned by the government equals
A) $24 million. B) $16 million. C) $8 million. D) more than $24 million. E) less than $8 million.
The level of crowding out associated with a tax cut will be smaller if the tax change has a supply-side effect than it will be if it only has a demand-side effect
Indicate whether the statement is true or false
Refer to the graph shown. The line segment that represents average total costs of producing Q* is:
A. BQ*. B. CQ*. C. AQ*. D. AB.
Why do/should we care that federal expenditures are becoming an increasingly larger portion of GDP?
What will be an ideal response?