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
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars. FIGURE 22-2
-Refer to Figure 22-2.What is the marginal propensity to spend (z)in this economy?
A)0.15
B)0.20
C)0.40
D)0.60
E)0.75

Question

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
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars.  FIGURE 22-2
-Refer to Figure 22-2.What is the marginal propensity to spend (z)in this economy?
A)0.15 
B)0.20 
C)0.40 
D)0.60 
E)0.75

Quizplus · Accepted Answer

The Answer of 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
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars.  FIGURE 22-2
-Refer to Figure 22-2.What is the marginal propensity to spend (z)in this economy?
A)0.15 
B)0.20 
C)0.40 
D)0.60 
E)0.75

The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical