Suppose the marginal propensity to consume is 0.8 and the government votes to increase taxes by $3 billion. Round to the nearest tenth if necessary. Assume the tax rate and the marginal propensity to import are 0.
a. Calculate the tax multiplier.
b. Calculate the resulting change in the equilibrium quantity of real GDP demanded.
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Home » Business » Suppose the marginal propensity to consume is 0.8 and the government votes to increase taxes by $3 billion. Round to the nearest tenth if necessary. Assume the tax rate and the marginal propensity to import are 0. a. Calculate the tax multiplier. b.