On February 1, Alan, a single individual, purchased his first personal residence for $400,000. On July 1, Alan sold this residen
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Answer:
less than the government spending multiplier
Explanation:
Given :
Percentage spends by a households for the increase in the income = 75%
So the mpc = 0.75
Potential output = 600 billion arcs
The government multiplier is =
= 4
The tax multiplier is =
= 3
Thus we see that the tax multiplier is less than the government spending multiplier.