# Economics

 .remove_background_ad { border: 1px solid #555555; padding: .75em; margin: .75em; background-color: #e7e7e7; } .rmbg_image { max-height: 80px; } If net taxes are cut, consumer spending increases by an amount less then the full amount of the tax cut if the MPC is 0.75 what is the value of the tax multiplier? -3.0 If the MPC is 0.6 and if the government purchases and net taxes both increase by \$20 billion, by how much will equilibrium output change? it will increase by \$20 billion Suppose the MPC is 0.85. If the government purchases increace by \$10 billion and net taxes fall by \$10 billion, equilibrium output will increase by \$123.3 billion one way to describe the tax multiplier is that it equals the spending multiplier -1.0 for any change in net taxes, we can calculate the resulting change in equilibrium GDP by using the following formula change in GDP=[-MPC/(1-MPC] x change in taxes If the tax multiplier is -4.0 what is the marginal propensity to consume? .80 if the marginal propensity to consumer is .75 and autonomous consumption spending will decrease by \$30 billion, by how much would next taxes need to decrease in order to have no change in output? (ignore any timing issues) \$40 billion Everything else being equal, a higher interest rate reduces consumption spending as people have a greater incentive to save which of the following would be most likely to increase consumption spending? a reduction in consumer credit card debt the most important factor that influences total spending is real disposable income the marginal propensity to consume is greater than zero but less then one true which of the following statements is most accurate? most of the variation on consumption spending can be explained by changes in disposable income which of the following would lead to a decrease in autonomous consumtion spending? an increase in the interest rate if the marginal propensity to consume is 0.5 and disposable income increaes by \$10,000, by how much will consumption spending increase? \$5000 if he marginal propensity to consume is .75, net taxes are fixed at \$2000 and real income rises by \$12000, by how much will real consumption spending increase? \$9000 if real disposable income increased by \$10000 and real consumption spending increased by \$7500 what is the marginal propensity consumer (MPC)? .75 if real consumption spending increases by \$400 billion each time real disposable incomes rises by \$1000 billion, the marginal propsensity to consume is .4 .remove_background_ad { border: 1px solid #555555; padding: .75em; margin: .75em; background-color: #e7e7e7; } .rmbg_image { max-height: 80px; } Authorjenboettcher1 ID18739 Card SetEconomics Descriptioneconomics Updated2010-05-11T06:38:04Z Show Answers