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Unformatted text preview: What is the value of the multiplier? 5. Assume that the tax rate is 0.35 and the marginal propensity to consumer is 0.50. What is the value of the multiplier? 6. Assume that the tax rate is 0.25 and the marginal propensity to consumer is 0.50. What is the value of the multiplier? 7. Suppose A – c r = 9.5 trillion dollars, the marginal propensity to consume is 0.6 and τ = .038. What is the equilibrium level of income? Illustrate your answer with a graph. What is the value of the multiplier? What is the new equilibrium level of output if A – c r declines to 9.2 trillion dollars? 8. What are the two ways that we can use our macroeconomic model? Briefly explain....
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This note was uploaded on 09/14/2009 for the course EC 400 taught by Professor Cover during the Spring '09 term at Alabama.
 Spring '09
 Cover

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