Suppose the MPC of a country is 0.72 and the government reduces taxes by $20 billion to stimulate the economy. How much of the tax reduction is likely to go into increased spending?

A. $27.8 billion B. $20 billion C. $7.6 billion D. $14.4 billion E. $52.6 billion'

Question

Tiki

27 September, 09:24

+5

Answers (1)

Know the Answer?

Athena Schneider · Answer 1

I think the answer is A or C

have a great day!

Suppose the MPC of a country is 0.72 and the government reduces taxes by $20 billion to stimulate the economy. How much of the tax reduction is likely to go into increased spending?A. $27.8 billion B. $20 billion C. $7.6 billion D. $14.4 billion E. $52.6 billion'