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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Definitions:

Probability

The calculation of how likely an event is to occur, with its value determined to be between 0 and 1.

Insulin-Dependent Diabetes

A chronic condition where the pancreas produces little or no insulin, requiring the person to administer insulin through injections or a pump; also known as Type 1 diabetes.

Poisson Distribution

A probability distribution that models the number of times an event occurs within a fixed interval of time or space.

Incidence

The frequency or rate at which new cases of a particular condition occur in a specified population over a given period of time.