Assume That Taxes Depend on Income

question 143

Multiple Choice

Assume that taxes depend on income. The MPC is 0.8 and t is 0.2. The government spending multiplier is

• A) 1.25.
• B) 2.78.
• C) 4.
• D) 4.17.

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Definitions:

Demographer

A social scientist who studies population dynamics, including birth rates, mortality rates, and migration patterns.

Net Migration Rate

The difference between the number of immigrants and the number of emigrants throughout the year, per 1,000 inhabitants in a given country.

Emigrants

Individuals who leave their own country to settle permanently in another.

Immigrants

Individuals who move from one country to another with the intention of settling permanently or temporarily in the new country.