Question: 3 . There is a tax - cut that increases your Disposable Income by $ 3 , 4 0 0 , which you intend to

3. There is a tax-cut that increases your Disposable Income by $3,400, which you intend to save $510.
a. Calculate the MPC.
b. Interpret this MPC.(What does it mean? Define MPC and describe in this context.)
c. What is the resulting fiscal multiplier?
d. Interpret the multiplier and describe the multiplier effect.
e. Find the total change to the economy from this tax change.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

Financial Planning Assignment (lines 6-10 recommendation) and Information are attached below. Thank you CLIENT INFORMATION Update: 2011 Personal Client: Tyler Bedo Co-client: Mia Bedo Tyler Bedo Mia...

Q:

I am having a lot of problem with my Financial Facilitator. Please help CLIENT INFORMATION Update: 2011 Personal Client: Tyler Bedo Co-client: Mia Bedo Tyler Bedo Mia Bedo DOB: 2/2/1974 Age: 43 DOB:...

Q:

1. Of the following statements, which explain why the crowding-out effect indicates government spending increases that are financed by the sale of Treasury bonds to the public will not necessarily...

Q:

1. Income choices a. What is disposable income? What are the two ways it can be allocated? b. What will a 2% increase in tax rates do to disposable income? If the MPS is .2, what is the MPC? d. If...

Q:

According to Keynes, the level of economic activity is predominantly determined by the level of Multiple Choice O Interest rates. O Aggregate supply. O Unemployment. O Aggregate demand.AS A01 - .2 g...

Q:

According to Keynes, the level of economic activity is predominantly determined by the level of Multiple Choice O Interest rates. O Aggregate supply. O Unemployment. O Aggregate demand.AS A01 - .2 g...

Q:

Can you please double check the answers. i couldt submit the ones for the graph 1.C = 0.8(Y - T) Y = 120; T = 20%. What happens if T increases to 25%? A C falls to 72. B C = 96. C C falls to 76.8. D...

Q:

in order to answer the explain the questions refer to the article below (5 pt.) Explain why the market for WTI crude oil can be viewed as a "perfectly competitive market." How is the price of crude...

Q:

1.C = 0.8(Y - T) Y = 120; T = 20%. What happens if T increases to 25%? A C falls to 72. B C = 96. C C falls to 76.8. D Nothing, the increase in T is offset by transfer payments. 2. What causes...

Q:

1.C = 0.8(Y - T) Y = 120; T = 20%. What happens if T increases to 25%? A C falls to 72. B C = 96. C C falls to 76.8 . D Nothing, the increase in T is offset by transfer payments. 0.8 (120-(20%*120))=...

Q:

Discuss the difference between ordinary interest computation and the annual percentage rate as it applies to car purchases, credit cards, and home purchases.

Q:

In 2014 a married employee claiming one withholding allowance is paid $800 in the current week. Cumulative earning to date is $4,000. Calculate the Following: 1. Federal Income Tax Withholding. 2....

Q:

2 0 1 4 \ table [ [ , Foclyalat,Iner Marlas Yalue ] , [ Land , T * HATH , 5 6 0 0 0 0 ] , [ pupunent ( % ywar remainion life ) , S 0 . 0 0 0 , 1 1 0 0 0 0 ] , [ I ishilities ( 1 0 . ywar temaisiry...

Q:

last two options for the multiple choice are : performance management development A construction equipment manufacturer, Roswell Corporation, is focusing on becoming a leader in sustainability in...

Q:

4. Why is it important to think beyond ourselves as individuals in intercultural interaction?

Q:

2. Describe how technology can impact intercultural interaction.

Q:

7. Define cultural space.