Answer:
Explanation:
The policy of tax cut will be less effective in country B than in country A since the value of the tax multiplier is lower in country B.
The multiplier effect refers to the increase in final income arising from any new injections.
Calculating the Multiplier Effect for a simple economy
k = 1/MPS
A = 1/0.1 =10
B= 1/.5=2
The spending that would occur during the third round of spending if the marginal propensity to consume (MPC) was 0.6 will be $420 billion.
- Increase in expenditure = $700 billion.
- Marginal propensity to consume = 0.6
The amount of spending based on the information given will be:
= 0.6 × $700 billion
= $420 billion.
Therefore, the correct option is $420 billion.
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Answer:
The middle class created a high and sustained demand for consumer goods
Explanation:
Before the advent of the industrial revolution, the social stratification of society is such that either you are in the lower class of the poor or you are part of the rich in the upper class. The industrial revolution of late 18th and early 19th centuries saw the springing up from the lower class a new set of wealthy and educated individuals which were later termed the middle class
This reach men and women are able to buy goods needed to satisfy their newly found social status which boost demand for new and quality goods produced as a result of industrial revolution.
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~Naterator
Please Rate and Thank If This Helped <3
