Suppose economists observe that an increase in government spending of 700 crore taka that raises the total demand for goods and services by 900 crore taka. If economists ignore the possibility of crowding out effect, calculate the marginal propensity to consume (MPC)?

Suppose economists observe that an increase in government spending of 700 crore taka that raises the total demand for goods and services by 900 crore taka. If economists ignore the possibility of crowding out effect, calculate the marginal propensity to consume (MPC)?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section11.A: Graphical Treatment Of Taxes And Fiscal Policy

Problem 2TY

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