Suppose the government enacts a stimulus program composed of $600
billion of new government spending and $100 billion of tax cuts for an economy currently producing a GDP of $13,000 billion.

If the government taxation multiplier is 0.8, the tax cut portion of the stimulus package will add _________ percentage points of extra growth to the economy.

(Round your response to two decimal places.)

	1.65
	0.83
	0.22
	0.62

Answer rating: 100% (QA)

The tax cut portions impact on GDP can be calculated using the government taxation multiplier formul... View the full answer