During the term of Pres. Benigno Aquino III was the scandal over lawmakers' misuse of PDAF (Priority Development Assistance Fund) or known as "pork barrel". Assuming that the fund went to the right hands', answer the following: 1. How much would have been generated in total income of the economy if the initial government spending is P220 B? Assume the marginal propensity to consume is 0.8. Show your solution. 2. What is the multiplier effect? (Note: Answer is numeric).

During the term of Pres. Benigno Aquino III was the scandal over lawmakers' misuse of PDAF (Priority Development Assistance Fund) or known as "pork barrel". Assuming that the fund went to the right hands', answer the following: 1. How much would have been generated in total income of the economy if the initial government spending is P220 B? Assume the marginal propensity to consume is 0.8. Show your solution. 2. What is the multiplier effect? (Note: Answer is numeric).

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 1DQ

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