Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 8SQ
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Question
If, Autonomous Private Final Consumption Expenditure = $ 13,500, Exports = $ 5000
Government Final Consumption Expenditure = $ 6800
Government Investment Expenditure = $ 8900
Marginal Propensity to Import = 0.1, Marginal Propensity to Save = 0.25, Tax rate = 20%
If Government increases its Investment Expenditure by $ 12,000, what is Marginal Propensity to Consume?
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