Solved

If the Marginal Propensity to Consume (MPC) Is 0

Question 156

Multiple Choice

If the marginal propensity to consume (MPC) is 0.75, and if policy makers wish to increase real GDP by $300 million, then by how much would they have to change taxes?


A) − $300 million.
B) − $200 million.
C) − 100 million.
D) − $50 million.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q25: According to supply-side fiscal policy, reducing tax

Q33: Unemployment insurance payments act as automatic stabilizers

Q40: The Laffer curve is a graph of

Q91: Supply-side economics is based on the theory

Q152: The tax multiplier is greater than the

Q155: Exhibit 15-4  Aggregate demand and supply model <img

Q157: Exhibit 15-6  Aggregate demand and supply model <img

Q158: Exhibit 15-7  Aggregate demand and supply model <img

Q159: The marginal propensity to consume (MPC) is

Q161: The government wishes to close an inflationary