Essay
Suppose the economy has no income taxes or imports. How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?
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The multiplier equals 
, so the larger t...View Answer
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Correct Answer:
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, so the larger t...View Answer
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