The marginal propensity to consume is 0.75. What will be the initial change in consumption when? 1) Taxes fall by $20 billion 2) Taxes rise by $40 billion 3) A recession leads to a reduction in personal income of $500 billion
The marginal propensity to consume is 0.75. What will be the initial change in consumption when? 1) Taxes fall by $20 billion 2) Taxes rise by $40 billion 3) A recession leads to a reduction in personal income of $500 billion
Chapter8: Aggregate Demand And The Powerful Consumer
Section: Chapter Questions
Problem 3DQ
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- The marginal propensity to consume is 0.75. What will be the initial change in consumption when?
1) Taxes fall by $20 billion
2) Taxes rise by $40 billion
3) A recession leads to a reduction in personal income of $500 billion
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