An Estimate of the MPC in the U

question 95

Multiple Choice

An estimate of the MPC in the U.S. is 0.90. Paul Krugman, the 2008 Nobel Prize winner in economics, stated, "... you'd be hard pressed to argue for an overall multiplier as high as 2."
Www) nytimes.com, 11/10/2008
What factors could explain the difference between the MPC and Krugman's estimate of the multiplier?

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

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Definitions:

Fixed Costs

Rephrased: Expenses that remain constant regardless of the company's level of production or business activity.

Trucking Department

A specialized division within a company responsible for the management and operation of trucking logistics, including transportation and delivery services.

Peak-Period Requirements

The increased demand or resources needed during the busiest or most active times for a business or service.

Variable Cost

An expense that fluctuates in tandem with the levels of output or sales, such as raw materials and direct labor costs.