Please show work.
5. In order to financially stimulate the nation, the Federal government injected $900 billion dollars into the economy. However, the results were less than spectacular. One reason could have been a failure to understand the marginal propensity to consume. Assume the marginal propensity to consume (MPC) was only 0.5. How much of that $900 billion went to increased consumption? Where did the rest of the money go?
Increased consumption: ________________________
Where did the rest go? _________________________
Using MPC = 0.5, what is the multiplier (the actual numerical value please):
What was the total change in spending as a result of the stimulus package?
Increased consumption: ________________________1500 billion $ Where did the rest go?... View the full answer
- i asked for you to show your work.
- Mar 04, 2016 at 7:20pm
- am working on the calculations please
- Mar 04, 2016 at 7:21pm
- the MPC = .5 not .4
- Mar 04, 2016 at 7:34pm