If taxes were cut by $1 trillion and the MPC was 0.93, by how much would total spending a. Increase in the first year with two spending cycles? b. Increase over three years, with two spending cycles per year? c. Increase over an infinite time period? $ 1.73 trillion trillion trillion

If taxes were cut by $1 trillion and the MPC was 0.93, by how much would total spending a. Increase in the first year with two spending cycles? b. Increase over three years, with two spending cycles per year? c. Increase over an infinite time period? $ 1.73 trillion trillion trillion

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.4P

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If taxes were cut by $1 trillion and the MPC was 0.93, by how much would total spending
a. Increase in the first year with two spending cycles?
b. Increase over three years, with two spending cycles per year?
c. Increase over an infinite time period?
$ 1.73 trillion
trillion
trillion

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