The CARES Act of 2020 increased disposable income by $600 billion. If consumers spent $430 billion of those income transfers immediately, Instructions: In part a, round your response to two decimal places. In part b. round your response to the nearest whole number. a. what was the MPC? b. how much stimulus would those income transfers ultimately provide?

The CARES Act of 2020 increased disposable income by $600 billion. If consumers spent $430 billion of those income transfers immediately, Instructions: In part a, round your response to two decimal places. In part b. round your response to the nearest whole number. a. what was the MPC? b. how much stimulus would those income transfers ultimately provide?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.7P

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What is the main reason for employing contractionary fiscal policy in a time of strong economic growth?
Why is government spending typically measured as a percentage of GDP rather than in nominal dollars?
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