If the MPC is 0.8, the net income tax rate is 0.2, the marginal propensity to import is 0.04 and the autonomous taxes decrease by $100 million, then we would expect GDP to increase by:
A) $250.00 million.
B) $227.27 million.
C) $200.00 million.
D) $50.00 million.
Correct Answer:
Verified
Q17: If the MPC is 0.8, the net
Q18: Q19: Which of the following best completes this Q20: Suppose that the government reduces its spending Q21: Other things equal, the multiplier effect of Q23: If the MPC is 0.8, the net Q24: Suppose, the autonomous government expenditure multiplier is Q25: Suppose that the government increases its spending Q26: The government budget balance (BB) is: Q27: GDP, the tax rate, autonomous taxes, transfer
A) government
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