4. Suppose the MPC is 0.8. What is the tax multiplier in this economy? If the government were to raise taxes by $300 in this economy how much would Total Spending change as a result? Show your work.

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Chapter9: Aggregate Demand
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4. Suppose the MPC is 0.8. What is the tax multiplier in this economy? If the government were
to raise taxes by $300 in this economy how much would Total Spending change as a result?
Show your work.
Transcribed Image Text:4. Suppose the MPC is 0.8. What is the tax multiplier in this economy? If the government were to raise taxes by $300 in this economy how much would Total Spending change as a result? Show your work.
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