-Summer 2018/2019 multiplier b. A higher marginal tax rate and a higher marginal propensity to import...
The ________ the marginal propensity to import, the ________ the expenditure multiplier. A. larger; smaller B. smaller; smaller C. larger; more negative D. larger; larger E. None of the above is correct, because the expenditure multiplier is not related to the marginal propensity to import.
If the marginal propensity to consume equals 0.75 the tax rate equals 0.25 and the marginal propensity to import equals 0.10 what is the value of the government purchases multiplier?
7. If marginal propensity to consume (mpc) is 0.8, tax rate (t) is 0.2, and marginal propensity to import (mpm )is 0.14, then the multiplier is: a) 4 b) 2 c) 3 d) 2.33 Your answer: Explanation: le 8. Given the value of the multiplier you got from question 7, if the government wanted to raise the equilibrium GDP by 100, it could: a) Raise only G by $100 b) Raise both G and T by 50 c) Raise only...
The open economy multiplier is calculated as follows: A. 1/[1minus−(marginal propensity to consume + marginal propensity to invest)] B. 1/[1minus−(marginal propensity to consume + marginal propensity to import)] C. 1/[1minus−(marginal propensity to consume + marginal propensity to invest + marginal propensity to import)] D. 1/[1minus−(marginal propensity to consume + marginal propensity to invest minus− marginal propensity to import)]
Q. How do the marginal propensity to consume, the marginal propensity to import and the income tax ratio influence the multiplier? How do fluctuation in autonomous expenditure influence real GDP?
Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax rate of 0.1 and a marginal propensity to import of 0.1. Economy B has a marginal propensity to consume of 0.6, a net tax rate of 0.2 and a marginal propensity to import of 0.2. Suppose there is a decrease in autonomous investment of $5 billion in each of these economies. Which of the following statements is true? A.The AD curve...
25. Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent of GDP. The spending multiplier for this economy is equal to _____. a. 0.54 b. 0.80 c. 1.25 d. 1.41 e. 1.85
Suppose that the marginal propensity to import decreases. Explain in a few sentences (typed in the box) the impact of this change on the multiplier.
If the marginal propensity to consume (MPC) increases... A. The MPS increases B. The multiplier decreases C. MPC +MPS is less than 1 D. THe multiplier increases
All else equal, how would an increase in the tax rate affect the government purchases multiplier? A. It increases the multiplier only if the marginal propensity to consume if the MPC is greater than the tax rate. B. It has no effect. C. It increases the multiplier only if the marginal propensity to consume (MPC) is less than the tax rate. D. It increases the government purchases multiplier. E. It decreases the government purchases multiplier.