Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider an economy experiencing an increase of autonomous consumption by $100 million. In this economy where the MPC is 0.7, the proportional tax rate is
Consider an economy experiencing an increase of autonomous consumption by $100 million. In this economy where the MPC is 0.7, the proportional tax rate is 0.25 and the marginal propensity to import is 0.2, the final impact on equilibrium GDP is: a. . S333 million O b. $210 million O c. $67.5 million O d. $235 million O e. $148 million
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started