Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 10, Problem 7E
To determine
To write:
The multiplier of the economy.
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Suppose that the MPC is .75 and the MPM is .1. What is the size of the multiplier?
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Suppose an economy has an MPC = 0.875.
1. If government spending increase by $100, how much will the GDP change?
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- As the MPC rises, the multiplier falls does not change increases falls by .05 for each .01 increase in the MPCarrow_forwardSuppose the MPC = 0.6? What will be the government spending multiplier? If, in this economy, government spending (G) increases by $300, what will happen to Total Spending? Show your workarrow_forwardWhat multiplier would you use to work out a decrease of 20%?arrow_forward
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