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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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Fynjy0 [20]

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4 0
2 years ago
discuss the influences of supply and demand in your daily life. describe one good and one service you use daily, and describe th
tester [92]

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I use coffee daily. The supply for the coffee I bought (Colombian Coffee) is few then the price is expensive.  As the price is expensive I can only buy 2 pounds of this item per month. My demand is affected for the price that producers set to this coffee. I would like to buy more but then the supply of this product is limited therefore the prices will always be high.

7 0
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Are there any special fees or interest rates, or both for Chash Advances and Balance Transfers?Explain.​
jek_recluse [69]

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3 0
3 years ago
Z is a normal good. The equilibrium price and equilibrium quantity of Z in the year 2011 was $25 and 60 units, respectively. In
Ymorist [56]

Answer:

D) Shift of the demand curve for Z to the left

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