Suppose that Congress enacts a lump-sum tax cut of $750 billion. The marginal propensity to consume is

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Suppose that Congress enacts a lump-sum tax cut of $750 billion. The marginal propensity to consume is equal to 0.75. Assuming that Ricardian equivalence holds true, what is the effect on equilibrium real GDP? On saving?

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Economics Today

ISBN: 978-0132554619

16th edition

Authors: Roger LeRoy Miller

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Question Posted: Aug 01, 2016 12:42 PM

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Suppose that Congress enacts a lump-sum tax cut of $750 billion. The marginal propensity to consume is

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A Ricardian equivalence theorem advises that when a governmen...View the full answer

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