Calculate the Government Purchases Multiplier If the Marginal Propensity to Consume

question 250

Multiple Choice

Calculate the government purchases multiplier if the marginal propensity to consume equals 0.8,the tax rate is 0.1,and the marginal propensity to import equals 0.2.

• A)2.1
• B)1.9
• C)1.7
• D)1.4

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Definitions:

Real Solutions

Real solutions refer to solutions of equations that are real numbers, not involving imaginary or complex numbers.

Quadratic Form

An expression in which the highest power of variables is squared, typically written in the form ax^2 + bx + c.

Square Root Property

A principle stating that for any positive number x, there exists a positive and negative value whose square equals x.

Square Root Property

Refers to a principle used to solve quadratic equations, stating that if \( x^2 = a \), then \( x \) is equal to both the positive and negative square root of \( a \).