Question
(5) The simple (autonomous) tax multiplier is given by -MPC/(1 - MPC). Suppose that the U.S. MPC is 0.9. Calculate the tax multiplier. If Congress
(5) The simple (autonomous) tax multiplier is given by -MPC/(1 - MPC). Suppose that the U.S. MPC is 0.9. Calculate the tax multiplier. If Congress lowers taxes by $100 billion to stimulate the economy devastated by the Coronavirus crisis, how much will U.S. GDP increase in the simple model?
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Environmental Economics
Authors: Stephen Smith
6th Edition
0199583587, 9780199583584
