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2 years ago

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _ by _.

1 answer:

8 0

If the government cuts taxes by $40 billion, this puts more money in consumers' pockets. Given an MPC of 0.8, this means they will spend $32 billion

Evaluating :

(0.8 × $40 = $32).

The correct answer is an increase of $32 billion.

GDP:

Gross domestic product (GDP) is a measure of the final goods and services produced with a specific region over a specified period of time. It is computed as follows:

GDP = Consumption + Government Spend + Investment + Net Exports

What is Marginal Propensity to Consume (MPC)?

Marginal propensity to consume (MPC) is measured as the portion of an increase in pay that a consumer would spend on goods and services as opposed to saving. Essentially, it is measuring how sensitive consumption in an economy is to increases in income. MPC is important in economics because it illustrates the effect that increased government spending has on the economy.

Learn more about Marginal propensity :

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3 years ago

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3 years ago

J. Morgan and M. Halsted are partners who share income and loss in a 3:1 ratio. After several unprofitable periods, the two part

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Answer:

cash 110,000 debit

land 100,000 credit

gain at disposal 10,000 credit

--to reocrd teh sale of land--

accounts payable 80,000 debit

cash 80,000 credit

--to record the payment of liabilities--

gain at disposal 10,000 debit

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Halsted 2,500 credit

--to distribute the gain from sale--

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Halsted 5000 share of 1/4 = 25%

there is gain of 10,000 in the sale distribute as follow

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3 years ago

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _____ by _____.

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _ by _.