A.)If the marginal propensity to save is 0.10,how large is the multiplier? If the marginal propensity to save doubles to .020 what happens to the multiplier. (show the calculations)
B.)Policy makers are trying to decide whether to stimulate a sluggish economy by enacting a $100 billion spending program or to push for passage of a $100 billion tax credit. Assume MPS is .10 Which would have the bigger final impact? (show the calculations)
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SUBJECTS / CATEGORIES:
1. Business Economics 2. Economics 3. Macroeconomics
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