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katerooshkie katerooshkie
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2 months ago
Multiplier Effects of Transfer Payments and Taxes

If the marginal propensity to consume (MPC) is 0.65, then the tax multiplier is ________. (Round to the nearest hundredth when appropriate.)

▸ -1.86

▸ 2.86

▸ 1.54

▸ -2.86
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
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BronosBronos
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More solutions for this book are available here
-1.86

The tax multiplier is calculated as: -MPC / (1-MPC).
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