Question

Assuming no change in government spending, an decrease in taxes of $80 billion with an mpc of 0.50 will add a total of $_____________ billion to the economy after the multiplier effect.

Answer 1

Assuming no change in government spending, a decrease in taxes of $80 billion with an mpc of 0.50 will add a total of $ 400 billion to the economy after the multiplier effect.

The economy is defined as the management of financial matters in communities, businesses, or families. An example of an economy is the US stock exchange system.

A standard definition of the economy might describe economics as a social science focused on meeting needs and desires through the allocation of scarce resources with alternative uses. Going further, we can say that economy is the study of scarcity and choice. The economy is defined as the management of financial matters in communities, businesses, or families. An example of an economy is the US stock exchange system.

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