1. If the MPC = 0.9, the govt. spending multiplier equals 2. If the MPC =...

 

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1. If the MPC = 0.9, the govt. spending multiplier equals 2. If the MPC = 0.9, the tax multiplier equals 3. If the govt. increases govt. spending by $50 million and the MPC equals 0.9. How much will RGDP increase? 4. If the govt. decreases taxes by $50 million and the MPC equals 0.9. How much will RGDP increase? 5. Which has a stronger effect on increasing RGDP: (i) an increase in Govt. spending? (ii.) or a decrease in taxes? 6. If the govt. wants to increase RGDP by $100 billion and MPC equals 0.75, how much must the govt. increase govt. spending? 7. If the govt. wants to decrease RGDP by $40 billion and MPC equals 0.8, how much must the govt. increase taxes? 8. If the MPC equals 0.9 and the Pres. and Congress increase fiscal spending by $60 billion, how much will RGDP increase? 9. If the MPC equals 0.8 and the Pres. and Congress decrease income taxes by $60 billion, how much will RGDP increase? 10. If the MPC equals 0.75 and Pres. & Congress increases taxes by $30 billion and decreases govt. spending by $30 billion, how will RGDP change? 1. If the MPC = 0.9, the govt. spending multiplier equals 2. If the MPC = 0.9, the tax multiplier equals 3. If the govt. increases govt. spending by $50 million and the MPC equals 0.9. How much will RGDP increase? 4. If the govt. decreases taxes by $50 million and the MPC equals 0.9. How much will RGDP increase? 5. Which has a stronger effect on increasing RGDP: (i) an increase in Govt. spending? (ii.) or a decrease in taxes? 6. If the govt. wants to increase RGDP by $100 billion and MPC equals 0.75, how much must the govt. increase govt. spending? 7. If the govt. wants to decrease RGDP by $40 billion and MPC equals 0.8, how much must the govt. increase taxes? 8. If the MPC equals 0.9 and the Pres. and Congress increase fiscal spending by $60 billion, how much will RGDP increase? 9. If the MPC equals 0.8 and the Pres. and Congress decrease income taxes by $60 billion, how much will RGDP increase? 10. If the MPC equals 0.75 and Pres. & Congress increases taxes by $30 billion and decreases govt. spending by $30 billion, how will RGDP change?

Answer rating: 100% (QA)

1 Government spending multiplier 1 1 MPC 1 1 09 101 10 Thus the value of government spending multiplier is 10 2 Tax multiplier MPC 1 MPC 09 1 09 0901 ... View the full answer