Ask International Economics Expert

The accompanying table show how consumer's marginal propensities to consume in a particular economy are related to their level of income.

Income Range Marginal propensity to consume
$0 - $20, 000 0.9
$20, 001 - $40, 000 0.8
$40, 001 - $60, 001 0.7
$60, 001 - $80, 000 0.6
Above $80, 000 0.5

a. suppose the government engages in increased purchases of goods and services. For each of the income groups in the accompanying table, what is the value of the multiplier that is, what is the "bang for the buck" from each dollar the government spends on government purchases of goods and services in each income group?

b. if the government needed to close a recessionary or inflationary gap, at which group should it primarily aim its fiscal policy of changes in government purchases of goods and services.

International Economics, Economics

  • Category:- International Economics
  • Reference No.:- M9693578
  • Price:- $18

Guranteed 24 Hours Delivery, In Price:- $18

Have any Question?


Related Questions in International Economics

Part of the return on the investment comes from the asset

Part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?

Legal aspects of international trade and enterprisetopic

Legal Aspects of International Trade and Enterprise TOPIC for ASSIGNMENT: Bumper Development Corp. Ltd. V. Commissioner of Police of the Metropolis and Others (For case review, refer Textbook: pp. 150-153) ASSIGNMENT GUI ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As