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igomit [66]
2 years ago
8

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

Business
1 answer:
Dmitriy789 [7]2 years ago
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 :

brainly.com/question/25821146

#SPJ4

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Tom, age 13, is claimed as a dependent by his parents. Tom has unearned income of $3,400 and $300 of income from mowing lawns in
Fiesta28 [93]

Answer:

$260

Explanation:

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4 0
3 years ago
Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,400 per acre. At the time of purchase,
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Answer:

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Answer:

The answer is service level agreement.

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A service contract between a vendor and a client that specifies what services will be provided, the responsibilities of each party, and any guarantees of service, is knwon as service level agreement.

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The correct option is C.
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