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Rina8888 [55]
2 years ago
6

In a closed economy with only lump-sum taxation, if the marginal propensity to consume is equal to 0. 75, a $70 billion increase

in government spending could cause a maximum increase in output of.
Business
1 answer:
Ber [7]2 years ago
7 0

The maximum increase in output would be $280 billion.

<h3>What is the maximum increase in output?</h3>

The MPC is known as the marginal propensity to consume. It is the fraction of income that is spent on consumption. The other fraction of income is expected to be saved.

The maximum increase in output = increase in government spending / ( 1 - MPC)

$70 / 0.25 = $280 billion

To learn more about marginal propensity to consume, please check: brainly.com/question/10710567

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A/An _______ is prepared by studding an onion with a few whole cloves and a bay leaf.
tresset_1 [31]

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Oignon piqué

Explanation:

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7 0
3 years ago
An investor has sold 1 ABC Jan 50 Call and has bought 1 ABC Apr 60 Call. This is a:________.
Kitty [74]

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diagonal spread

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Spread is basically a sale and purchase of a call. So here the the types of spreads determine the relationship between the strike price and the expiration dates of all options involved in the trade.

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The option horizontal spread is incorrect because it is a spread that depicts the difference in expiration dates but strike price is the same. Here both the expiration and strike price are different.

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The option dialogue spread is not a valid option too.

The option Combination is also suitable because this is an example of Combination and combinations include option spread trades such as vertical spreads, horizontal spreads, and diagonal spreads.

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5 0
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