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The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

Question 66

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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. 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 value of the multiplier in this economy? A) 1.33 B) 1.67 C) 2.0 D) 2.5 E) 6.67 FIGURE 22-2
Refer to Figure 22-2.What is the value of the multiplier in this economy?


A) 1.33
B) 1.67
C) 2.0
D) 2.5
E) 6.67

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