Question: I need help with the following question 1. Using the mean multiplier estimates in this table, what is the MPC for each category? 2. Using
I need help with the following question

1. Using the mean multiplier estimates in this table, what is the MPC for each category? 2. Using your percentage change formula, what calculations do you come up with comparing the implied effects on 1. Using the mean multiplier estimates in this table, what is the MPC for each category? 2. Using your percentage change formula, what calculations do you come up with comparing the implied effects on the aggregate demand versus the amounts you see in the first column (the proposed spending amounts). Again, use the mean values. Do this for each category Estimated aggregate demand stimulated by Biden administration's $1.9 trillion relief package by program Program Multiplier estimates Implied effects on demand spending (billions of dollars) amounts* (billions of dollars) Mean Low High Mean Low High Individual rebates 520 0.8 0.3 1.5 416.0 156.0 780.0 Unemployment insurance + 320 1.5 0.4 2.1 480.0 128.0 672.0 targeted relief Health care 160 1.5 0.5 2.5 240.0 80.0 400.0 Other public investments 325 1.5 0.5 2.5 487.5 162.5 812.5 State and local aid 520 1.1 0.4 1.8 572.0 208.0 936.0 Sum 1,845 2,195.5 734.5 3,600.5 *The sum of program amounts leaves out measures adding up to $55 billion, for which it is difficult to guess what the relevant multiplier might be
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
