Question
Calculate the slope of the AE curve and the size of the multiplier if MPC=0.80. Then calculate the revised slope of the AE curve and
Calculate the slope of the AE curve and the size of the multiplier if MPC=0.80. Then calculate the revised slope of the AE curve and the mulitplier when you know that the marginal propensity to import is 0.15 and the marginal tax rate (induced tax rate) is 0.2 (4marks)
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Microeconomics
Authors: Paul Krugman, Robin Wells
3rd edition
978-1429283427, 1429283424, 978-1464104213, 1464104212, 978-1429283434
