What is the government spending multiplier

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Answer the following:

a. MPS = .4. What is the government spending multiplier?

b. MPC = .9. What is the government spending multiplier?

c. MPS = .5. What is the government spending multiplier?

d. MPC = .75. What is the tax multiplier?

e. MPS = .1. What is the tax multiplier?

f. If the government spending multiplier is 6, what is the tax multiplier?

g. If the tax multiplier is -2, what is the government spending multiplier?

h. If government purchases and taxes are increased by $100 billion simultaneously, what will the effect be on equilibrium output (income)?

Reference no: EM131309094

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