FIGURE 22-2Refer to Figure 22-2. What is the marginal propensity to spend (z) in this economy?Select one:O A. 0.75B. 0.20O C. 0.60D. 0.15O E. 0.40 The diagram below shows desired aggregate expenditure for a hypothetical economy. Assume the followingfeatures of this economy:•marginal propensity to consume (mpc) = 0.75•net tax rate (t) = 0.20•no foreign tradeDesired Aggregate Expenditure (AE)•fixed price level• all expenditure and income figures are in billions of dollars.2501751000450AEI + GIActual National Income (Y)

Given,marginal propensity to consume = 0.75net tax rate=0.20

Answered: Refer to Figure 22-2. What is the…

Refer to Figure 22-2. What is the marginal propensity to spend (z) in this economy? Select one: O A. 0.75 OB. 0.20 O C. 0.60 O D. 0.15 O E. 0.40

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

FIGURE 22-2
Refer to Figure 22-2. What is the marginal propensity to spend (z) in this economy?
Select one:
O A. 0.75
B. 0.20
O C. 0.60
D. 0.15
O E. 0.40

The diagram below shows desired aggregate expenditure for a hypothetical economy. Assume the following
features of this economy:
•marginal propensity to consume (mpc) = 0.75
•net tax rate (t) = 0.20
•no foreign trade
Desired Aggregate Expenditure (AE)
•fixed price level
• all expenditure and income figures are in billions of dollars.
250
175
100
0
450
AE
I + G
I
Actual National Income (Y)

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