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Sergeu [11.5K]
1 year ago
13

When the mpc = 0.75, the desired tax cut for achieving a $300 billion fiscal stimulus is _____.

Business
1 answer:
Maru [420]1 year ago
6 0

Based on the marginal propensity to consume, the required tax cut to get a $300 billion stimulus is $400 billion.

<h3 /><h3>How much of a tax cut is needed?</h3>

This can be found by the formula:

= Required fiscal stimulus / Marginal propensity to consume

Solving gives:

= 300 / 0.75

= $400 billion

In conclusion $400 billion of tax cuts are needed.

Find out more on marginal propensity to consume at brainly.com/question/17930875.

#SPJ11

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