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StudyGuideforAPCandMPC_000

# StudyGuideforAPCandMPC_000 - Study Guide for APC and MPC...

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Study Guide for APC and MPC Practice Problems for test on Average and Marginal Propensities to Consume and Save Test: Monday Read: Pages 177-179, Section 9.3 in your ORANGE REVIEW (5 Steps to a 5) book. The explanation on the multiplier is easier in this book than in your textbook. 1. What is the formula for MPC? 2. What is the formula for MPS? 3. What is the formula for APC? 4. What is the formula for APS? 5. What is the difference between the APC and the MPC? * Make sure to memorize all of the above formulas for the test. 6. If the MPC is .8, what is MPS? 7. If MPC is .9, what is MPS? 8. If MPC is .75, what is MPS? 9. If MPC is .55, what is MPS? 10. If MPC is .62, what is MPS? 11. If MPC is .88, what is MPS? 12. If MPC is .6, what is MPS? * In questions 6-12, note that the two numbers added always equal 1 13. If the MPC is .8, what is the government or investment multiplier? 14. If the MPC is .9, what is the government or investment multiplier? 15. If the MPC is .75, what is the government or investment multiplier? 16. If the MPC is .6, what is the government or investment multiplier? 17. If the MPC is .8, what is the tax multiplier? 18. If the MPC is .9, what is tax multiplier? 19. If the MPC is .75, what is tax multiplier? 20. If the MPC is .6, what is tax multiplier? 21. If the government raises taxes by \$200, and the MPC is .9, how much will the decrease in GDP be?

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StudyGuideforAPCandMPC_000 - Study Guide for APC and MPC...

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