The expiration of the FICA payroll tax cut of January 1, 2013 raised taxes by $110 billion

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The expiration of the FICA payroll tax cut of January 1, 2013 raised taxes by $110 billion per year. If the marginal propensity to save was 0.20,

(a) By how much did consumer spending decrease initially?

(b) What was the ultimate decline in aggregate demand?

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Essentials of Economics

ISBN: 978-1259235702

10th edition

Authors: Bradley Schiller, Karen Gebhardt

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Question Posted: Aug 30, 2017 11:56 PM

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The expiration of the FICA payroll tax cut of January 1, 2013 raised taxes by $110 billion

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a 88 billion b 440 billion Explanation Recall Marginal propensity t...View the full answer

Essentials of Economics

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