Which of the following formulas is used to find the cumulative increase in AD from a particular fiscal stimulus?
A) Fiscal stimulus ÷ the multiplier.
B) Fiscal stimulus ÷ MPC.
C) The multiplier × fiscal stimulus.
D) MPC × fiscal stimulus.
Correct Answer:
Verified
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Q30: A tax cut
A)Directly decreases the disposable income
Q31: If the MPC equals 0.80,a $200 billion
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Q34: To eliminate an AD shortfall of $100
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