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CaHeK987 [17]
3 years ago
11

If the MPC in an economy is 0.8, government could close a recessionary expenditure gap of $100 billion by cutting taxes by

Business
1 answer:
QveST [7]3 years ago
8 0

Answer:

cutting taxes by $125 billion

Explanation:

given data

economy = 0.8

expenditure gap = $100 billion

to find out  

cutting taxes

solution

we get here cutting or reduce taxes that is express as

cutting taxes = \frac{expenditure\ gap}{MPN\ economy} ......................... 1

cutting taxes = \frac{100}{0.8}    

solve we get cutting taxes

cutting taxes = $125 billion

so cutting taxes by $125 billion

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3 years ago
"The owner of a small restaurant that sells take-out fried chicken and biscuits pays $2,500 in rent each month, $500 in utilitie
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