Complete the following: a. If the tax multiplier is -1, then the marginal propensity to save is
Question:
Complete the following:
a. If the tax multiplier is -1, then the marginal propensity to save is _________ the marginal propensity to consume.
b. If the government spending multiplier is 8, then the marginal propensity to save equals ______.
c. If the marginal propensity to consume is two times the marginal propensity to save, then the government spending multiplier equals _______.
d. If the marginal propensity to save is 0.5, then the tax multiplier equals _______.
e. If the marginal propensity to save increases by 10 percent, then the government spending multiplier ________.
f. If the marginal propensity to consume goes from 0.8 to 0.85, then the tax multiplier _________.
g. If the tax multiplier increases (in absolute value) from -1 to -2, this means that the marginal propensity to consume has ______ relative to the marginal propensity to save.
h. If the government spending multiplier decreases from 5 to 4, this means that the marginal propensity to save has _______.
Step by Step Answer:
Principles Of Macroeconomics
ISBN: 9781292303826
13th Global Edition
Authors: Karl E. Case,Ray C. Fair , Sharon E. Oster