spending multiplier is smaller the: greater the change in the price level that follows a spending change larger the marginal propensity to withdraw larger the marginal propensity to consume greater the change in government purchases in the economy greater the change in the interest

spending multiplier is smaller the: greater the change in the price level that follows a spending change larger the marginal propensity to withdraw larger the marginal propensity to consume greater the change in government purchases in the economy greater the change in the interest

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In each of the following cases, calculate the values of MPC, MPW, and the spending multiplier. Enter your responses below rounded to 2 decimal places. a. A $2 million increase in Income leads to a $700,000 rise in consumption on domestic items. MPC is therefore and the spending multiplier is b. A $10 million decrease in income results in a $3 million drop in consumption on domestic Items. MPC is therefore and the spending multiplier is c. A $10 million decrease in income causes a $9 million drop in withdrawals. MPC is therefore spending multiplier is MPW IS MPW IS MPW IS and the
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