Consider a Simple Macro Model with Demand- Determined Output

question 9

Multiple Choice

Consider a simple macro model with demand- determined output. Which of the following parameters will produce the strongest automatic stabilizer?

• A)MPC = 0.7, t = 0.1, m = 0.4
• B)MPC = 0.9, t = 0.2, m = 0.4
• C)MPC = 0.7, t = 0.3, m = 0.2
• D)MPC = 0.8, t = 0.1, m = 0.2
• E)MPC = 0.8, t = 0.2, m = 0.3

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