Question

If the mpc is .5 what is the least amount the government could cut taxes to close the gap

Answer 1

The marginal propensity to consume is the proportion of an increase in income that is spent by the economic agent on consumption

What is MPC?

It should be noted that the marginal propensity to consume is the proportion of an aggregate raise in pay which a consumer spends on the consumption of goods and services.

It's a component of the Keynesian macroeconomic theory. It is calculated as the chnae in consumption over the change in income.

For example, let's say that the consumption increases by 70 cents for every additional dollar of income. This will be:

= 0.7/1

= 0.7

Note that an overview was given as the complete question wasn't found.

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