In a Simple Macro Model Where the Marginal Propensity to Consume

question 100

Multiple Choice

In a simple macro model where the marginal propensity to consume out of disposable income is 0.8,the net tax rate is 0.25,and the marginal propensity to import is 0.12,the simple multiplier will be

• A)0.480.
• B)1.471.
• C)1.923.
• D)2.083.
• E)2.110.

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Definitions:

Perfect Competitor

A market structure where many firms sell identical products, allowing no single company to influence the market price.

Imperfect Competitor

A firm that has some control over the market price of its product because the product is differentiated and there are few substitutes.

Wage Rate

The amount of money paid to an employee per unit of time, often hourly or annually, for their labor.

Wage Rate

The amount of money paid to an employee for a specified quantity of work, usually expressed per hour or year.