Assume That in a Particular Economy,MPC = 0

question 66

Multiple Choice

Assume that in a particular economy,MPC = 0.6 and the MPM = 0.2.What is the value of the multiplier?

• A)0.6.
• B)1.82.
• C)1.67.
• D)2.
• E)5.

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Definitions:

Income

Monetary payment received for work, from investments, or from government benefits, contributing to an individual's wealth.

Marginal Tax Rate

The tax rate applied to the last dollar of income, showing the percentage of additional income that is paid in tax.

Income

The amount of money or value received, typically on a regular basis, for work or through investments.

Tax Rates

Tax rates refer to the percentage at which an individual or corporation is taxed on their income or property.