Question: Compute the total new spending created by a $10-billion federal income tax cut when the populations marginal propensity to consume is 95%. Compare your result

Compute the total new spending created by a $10-billion federal income tax cut when the population’s marginal propensity to consume is 95%. Compare your result with that of Example 3, and note how a small change in the MPC makes a dramatic change in the total spending generated by the tax cut.

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