An Estimate of the MPC in the U

question 480

Multiple Choice

An estimate of the MPC in the U.S. is 0.80.
Paul Krugman, the 2008 Nobel Prize winner in economics, stated, "... you'd be hard pressed to argu an overall multiplier as high as 2." HYPERLINK "http://www.nytimes.com/" (www.nytimes.com, 11/10/2008)
What factors could explain the difference between the MPC and Krugman's estimate of the multipli

• A) investment and imports.
• B) imports and taxes.
• C) exports and investment.
• D) taxes and investment.

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